It’s official. Twinkies will be shutting their doors and close to 18,000 employees will be losing their jobs.
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.
After the company’s announcement last week that it would need to liquidate after claiming that a strike by workers crippled its business, consumers cleared store shelves of Hostess products, especially Twinkies, out of fear they would never taste the spongy, yellow cakes again.
There could be a silver lining in this Twinkie tale. Hostess bankers testified to a “flood” of inquiries into buying Hostess brand names from other food makers, from stores and supermarkets, including Wal-Mart, and from investment interests.
According to testimony by a Hostess Brands adviser, many of the interested buyers have asked if they could keep some of the workers employed in the factories.
To keep value for the brands, including Twinkies, Ho Hos, Sno Balls and Wonder Bread, the buyers need to move quickly. That could mean keeping jobs for as seamless a transition as possible.
Courtesy of www.thebellereport.net www.twitter.com/thebellereport
