(WHITE PLAINS, N.Y.) — A bankruptcy judge asked Hostess Brands Inc., the maker of Wonder Bread and Twinkies, and its bakers’ union to agree to mediation before the company liquidates, creating a possible lifeline for about 18,000 jobs.
Hostess had requested Judge Robert Drain of the U.S. Bankruptcy Court in White Plains, N.Y., who is overseeing the company’s bankruptcy filed in January, to be able to liquidate its assets after a dispute with the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM).
“To me not to have gone through that step leaves a huge question mark over this case, which I think—I may be wrong—but I think will only be answered in litigation,” Judge Drain said, the Wall Street Journal reported. “And that’s no one’s desired outcome.”
A spokesman for Hostess declined to comment about the possible mediation. BCTGM did not immediately return a request for comment.
The judge called for a recess on Monday and the parties are expected to meet again on Wednesday.
Hostess had announced on Friday that it will liquidate because not enough striking employees returned to work by a Thursday evening deadline set by the company. But on Monday, Gregory F. Rayburn, chief executive officer, told ABC News, “I think we’ll find buyers.”
A handful of companies had 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.
Copyright 2012 ABC News Radio
John Clyde, KSL.com
Matt Egan, CNN