(WHITE PLAINS, N.Y.) — The judge overseeing the bankruptcy of Hostess Brands Inc., maker of Twinkies and Wonder Bread, has approved the company’s plans to wind down after it failed to come to an agreement with its bakers’ union.
Judge Robert Drain of the U.S. Bankruptcy Court in White Plains, N.Y., had sent the two parties into talks on Tuesday, saying it was worth one more effort to save the firm’s 18,000 jobs.
In a statement late Tuesday, Hostess said it would not comment on the breakdown in talks other than to say that mediation “was unsuccessful.” A lawyer for the bakers union said he had no comment, citing mediation ground rules.
An attorney for Hostess told Drain on Wednesday that closing down the company would take a few months and that it has seen strong interest from buyers.
On Monday, Gregory F. Rayburn, chief executive officer, told ABC News, “I think we’ll find buyers.”
A handful of companies have reportedly expressed interest in buying Hostess Brands, including private equity firm Sun Capital Partners Inc., based in Boca Raton. Sun Capital did not immediately return a request for comment.
Last week, Hostess said it would move to wind down its business and start selling off its assets in bankruptcy court. The company cited a crippling strike that was started on Nov. 9 by the Bakery, Confectionery, Tobacco Workers and Grain Millers International (BCTGM) Union, which represents 30 percent of Hostess workers. Hostess had imposed a contract that would cut workers’ wages by 8 percent. The BCTGM said the contract would also cut benefits by 27 to 32 percent.
“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” Rayburn said in a statement last Friday. “Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders.”
The wind down means the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States, the company said.
Copyright 2012 ABC News Radio
Nate Eaton, EastIdahoNews.com
Kathryn Vasel, CNN
Kathryn Vasel, CNN