Hostess Brands Inc. has announced that it will file a motion with the U.S. Bankruptcy Court on Friday to liquidate the entire company
(KFBK) Hostess Brands Inc. has announced that it will file a motion with the U.S. Bankruptcy Court on Friday to liquidate the entire Company if enough striking employees do not return to work by 5 p.m., EST, Thursday to enable the Company to resume normal operations. The strikes were called on November 9 by the Bakery, Confectionery, Tobacco Workers and Grain Millers Union (BCTGM).
“We simply do not have the financial resources to survive an ongoing national strike,” said Gregory F. Rayburn, the Company’s Chairman and CEO. “Therefore, if sufficient employees do not return to work by 5 p.m., EST, on Thursday to restore normal operations, we will be forced to immediately move to liquidate the entire Company, which will result in the loss of nearly 18,000 jobs. It is now up to Hostess’ BCTGM represented employees and Frank Hurt, their international president, to decide if they want to call off the strike and save this Company, or cause massive financial harm to thousands of employees and their families.”
Hostess has done everything in its power to pursue a reorganization of its business as a going concern, including spending the better part of 18 months negotiating with its key constituents to obtain a consensual agreement. As previously disclosed, the Company has obtained the support of its largest union, the International Brotherhood of Teamsters, and its lenders. With the support of the BCTGM, Hostess believes it would successfully reorganize.
If sufficient employees do not return to work by the deadline to restore normal operations, the liquidation process will unfold as follows:
Hostess will file a motion with the U.S. Bankruptcy Court on Friday, November 16, 2012 requesting to wind-down the Company and sell all of its assets;
Hostess has requested a hearing on the motion for Monday, November 19, 2012;
If the motion is granted at this hearing, Hostess Brands will begin to close all of its operations as early as Tuesday, November 20, 2012. The closures will include the termination of all employees except small, temporary crews to clean, secure and prepare facilities and other assets for sale.
Hostess, the company that produces a wide assortment of snack cakes along with Wonder Bread, is setting a deadline for striking employees to get back to work. The company says it will ask a U.S. bankruptcy judge for permission to liquidate if normal operations can't be resumed by the end of the day today. Workers represented by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union walked off their jobs on November 9th, protesting pay cuts of nearly nine-percent. Hostess Chief Executive Gregory Rayburn has issued a statement saying "We simply do not have the financial resources to survive an ongoing national strike." Hostess says if it's permitted to liquidate it will begin shutting down all operations as soon as November 20th.
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