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[h=1]Bankruptcy judge approves Hostess liquidation[/h]
It's official. Twinkies are toast, at least as far as being a Hostess product is concerned.
Hostess Brands Inc on Wednesday won permission from a U.S. bankruptcy judge to begin shutting down, and expressed optimism it will find new homes for many of its iconic brands, which include Twinkies, Drake's cakes and Wonder Bread.
U.S. Bankruptcy Judge Robert Drain in White Plains, N.Y., authorized current management, led by restructuring specialist Gregory Rayburn, to immediately begin efforts to wind down the 82-year-old company, a process expected to take one year.
"It appears clear to me that the debtors have taken the right course in seeking to implement the wind-down plan as promptly as possible," Drain said near the end of a four-hour hearing.
The judge authorized Hostess to begin the liquidation process one day after his
last-ditch mediation effort between the Irving, Texas-based company and its striking bakers' union broke down.
Hostess CEO Gregory Rayburn testified at a bankruptcy hearing Wednesday that he will have to terminate 15,000 employees immediately. Most of the remaining 3,200 workers are expected to be let go within four months.
"This is a tragedy, and we're well aware of it," Heather Lennox, a lawyer for Hostess, told the judge. "We are trying to be as sensitive as we can possibly be under the circumstances to the human cost of this."
The union, the Bakery, Confectionery, Tobacco and Grain Millers Union, has complained it should not be forced into new wage and benefit cuts, on top of earlier give-backs, while top executives rewarded themselves with higher pay, and that it was "well aware" of the potential consequences of that stance.
The union said in a court filing that its sole objective was to leave Hostess with "a real, rather than an illusory or theoretical, likelihood of establishing a stable business with secure jobs."
Union president Frank Hurt was not immediately available for comment.
"This is truly a sad day for thousands of families affected by the closing of this company," said Teamsters General Secretary-Treasurer Ken Hall in a statement. "I want to assure our members that despite this outcome, they do not stand alone and their union will continue to work on their behalf to help them find new employment."
About 6,700 Hostess workers are members of Teamsters.
Bankruptcy judge approves Hostess liquidation - Life Inc.