Twinkies Maker Hostess Files for Chapter 11 Protection

Hostess Brands Inc. filed for Chapter 11 bankruptcy protection Wednesday to confront burdensome debt and labor costs that the Twinkies and Wonder Bread baker says have left it fighting to compete.

The privately held Irving, Texas, company's move marks the second significant court restructuring in the past several years. In a statement, Hostess said the current cost structure "is not competitive, primarily due to legacy pension and medical benefit obligations and restrictive work rules." It said it would be able to maintain operations thanks to a $75 million financing commitment from a group of lenders.

In bankruptcy, Hostess said it plans to continue negotiating with 12 unions to modify the collective-bargaining agreements governing the employment of its union workers, who comprise 83% of its approximately 19,000 employees.

Read Full Article from Wall Street Journal

- Posted: 2012-01-11 12:43:29

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