Twinkie Maker Hostess Plans to Liquidate in Bankruptcy

One of America's favorite snack foods is in jeopardy of being taken off the shelves. The maker of the cream-filled Twinkie, Hostess Brands Inc., announced last week that it is liquidating and going out of business after a failed bankruptcy. Hostess also made such household names as the Ho Ho, Ding Dong, and Wonder Bread.

Since the news of the company’s liquidation, people all over the country have been clearing grocery store shelves, stocking up on the cakes and sweets. Reports say, however, that the snack company may be bought out by another, saving the products from going extinct.

The Texas-based Hostess Inc. is reportedly petitioning the federal court to go out of business after thousands of Hostess workers went on strike to oppose wage and pension cuts. According to Reuters, the liquidation means their nearly 18,500 employees will lose their jobs as 33 plants close across the nation. It’s hard to believe the Twinkie-maker that could be considered the most well-known brand of its kind, and certainly the most popular snack-cake producer to date, would go out of business with a reported $2.5 billion in sales. But health foods are arguably surpassing so-called “junk food” in popularity for many American families in 2012.

The Labor Dispute

The original bankruptcy, filed in 2004, was followed by complaints from employees and unions regarding pay and retirement issues. The company was unable to successfully restructure its finances in the filing and product deliveries were suffering due to striking workers.

The heavy debt that Hostess faced was still a problem even after emerging from bankruptcy in 2009, and accusations from employees began to circulate. According to Reuters, union members and other workers claimed that management ignored the need for more investment in marketing and “modernization of the plants and trucks;” and that instead, Hostess owners became richer and richer off the failing company’s private capital--a trend of accusations common among large corporations in recent years.

It seems the company has no choice at this stage but to retire their 82-year operation and liquidate. There are reports of another company buying the manufacturing sector of the tasty foods, meaning there's a chance the products will still be available, at the relief of Twinkie fans everywhere.

comments powered by Disqus

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential

Call us today for a free consultation (855) 466-5776