Hostess Gets Aproval To Wind Down Operations
IRVING (CBSDFW/AP) -- A bankruptcy court judge in New York is approving a request by Hostess Brands Inc. to begin winding down its operations.
The ruling came Wednesday in White Plains, New York after the maker of Twinkies and Ding Dongs failed in last-ditch negotiations Tuesday to end a strike by its second-largest union.
Hostess, based in Irving, now has the green light to terminate the jobs of its 18,000 workers and sell off its brands. The brand has been dealing with striking workers at plants across the country since November 9.
In court Wednesday, Hostess said it needed to begin the liquidation process quickly to take advantage of outside interest in its brands, which a banker said could fetch up to $2.4 billion. That's about how much they generate in annual sales.
The judge allowed Hostess to return excess ingredients and packaging in an effort to get access to cash.
Hostess has been spending about $1 million a day in payroll without any income since it halted operations last week.
The company will retain 3,200 employees nationwide to assist with wind-down operations. In a release, the company said the process will take one year.
Carrollton Republican State Representative Burt Solomons called out executives of the company for hiding behind the bankruptcy hearing. "Management wants their bonuses, they want their insider plans for - in effect - mismanaging the company. I thought it was a shameful use of the bankruptcy court," he told KRLD.
KRLD's Chuck Schechner reports:
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