NEW YORK (AP) — The future of Twinkies is virtually assured.
Hostess Brands Inc. got final approval for its wind-down plans in bankruptcy court Thursday, setting the stage for its iconic snack cakes to find a second life with new owners — even as 18,000 jobs will be wiped out.
The company said in court that it's in talks with 110 potential buyers for its brands, which include CupCakes, Ding Dongs and Ho Hos. The suitors include at least five national retailers such as supermarkets, a financial adviser for Hostess said. The process has been "so fast and furious" Hostess wasn't able to make its planned calls to potential buyers, said Joshua Scherer of Perella Weinberg Partners.
"Not only are these buyers serious, but they are expecting to spend substantial sums," he said, noting that six of them had hired investment banks to help in the process.
The update on the sale process came as Hostess also received approval to give its top executives bonuses totaling up to $1.8 million for meeting certain budget goals during the liquidation. The company says the incentive pay is needed to retain the 19 corporate officers and "high-level managers" for the wind down process, which could take about a year.
Two of those executives would be eligible for additional rewards depending on how efficiently they carry out the liquidation. The compensation would be on top of their regular pay.
The bonuses do not include pay for CEO Gregory Rayburn, who was brought on as a restructuring expert earlier this year. Rayburn is being paid $125,000 a month.
Hostess was given interim approval for its wind-down last week, which gave the company the legal protection to immediately fire 15,000 union workers. The company said the terminations were necessary to free up workers to apply for unemployment benefits. About 3,200 employees are being retained to help in winding down operations, including 237 employees at the corporate level.
The bakers union, Hostess' second-largest union, has asked the judge to appoint an independent trustee to oversee the liquidation, saying that the current management "has been woefully unsuccessful in its reorganization attempts." Hostess had already said last week that it was getting a flood of interest from potential buyers for its brands, which also include Devil Dogs and Wonder bread. The company has stressed it needs to move quickly to capitalize on the outpouring of nostalgia sparked by its liquidation.
"The longer these brands are off the shelves, the less they're going to be valued," Scherer said Thursday in U.S. Bankruptcy Court in the Southern District of New York in White Plains, N.Y.
Last week, Scherer had noted that it was a "once-in-a-lifetime opportunity" for buyers to snap up such well-known products without the debt and labor contracts that would come with the purchasing the entire company. Although Hostess sales have been declining over the years, they still clock in at between $2.3 billion and $2.4 billion a year.
Scherer also said a surprising number of potential buyers have expressed interest in most of its three dozen factories.
The company's demise came after years of management turmoil and turnover, with workers saying the company failed to invest in updating its products. In January, Hostess filed for its second Chapter 11 bankruptcy in less than a decade, citing steep costs associated with its unionized workforce.
Although Hostess was able to reach a new contract agreement with its largest union, the Teamsters, the bakers union rejected the terms and went on strike Nov. 9. Hostess announced its plans to liquidate a week later, saying the strike crippled its ability to maintain normal production.
In court Thursday, an attorney for Hostess noted that the company is no longer able to pay retiree benefits, which come to about $1.1 million a month. Hostess stopped contributing to its union pension plans more than a year ago.
Toward the end of the hearing, a man who said he'd worked for Hostess for 34 years stood to give his objections to the wind-down plan, saying creditors shouldn't be paid when the company hasn't been making its contributions to workers' pension funds.
"I have traveled pretty far to get here," he said, noting that many of his co-workers didn't know how to get to the hearing and speak for themselves. "I just wanted to be heard."
NEW YORK (AP) — The future of Twinkies is virtually assured.
High School Sports Scoreboard: 03/07/2014
A roundup of scores from today's boys district basketball tournament games:Continued ...
Benzonia woman accused of prescription fraud
A Benzonia woman faces a felony charge after authorities said she fraudulently obtained hundreds of prescription pills.Continued ...
Panthers roar in regional final
Tim Reznich is hoping Frankfort can have a reunion with Nicole Marshall. And history says the Panthers may very well do that.Continued ...
Dispatch: Smart911 worth the price
An online service that gives Grand Traverse County 911 responders potentially vital information about callers cost taxpayers almost $19 per call in its first half-year of operation.Continued ...
TC native joins Team Blake on TV's 'The Voice'
Ryan Whyte Maloney finally can spill the beans: he’s a bona fide contestant on “The Voice.”Continued ...
Editorial: Beach testing grant exposes state's lack of commitment
The issue: GT Band to fund beach testing program for 2014. Our view: Grant points up state's failure to act.Continued ...
Passengers wrongly told TC airport was ‘closed’
Len Price and his family just wanted to get home. The Traverse City resident, 72, his wife, Linda, and son Logan were headed home from a Montana skiing vacation March 1 when weather caused long delays to their United Airlines flight.Continued ...
Pastor sues former church over contract
A controversial pastor’s public schism with his former church moved into the legal realm.Continued ...
OTP revives 'Sound of Music' after 20 years
Kathy Verstraete unearthed some familiar artifacts while she packed her mother’s home two years ago.Continued ...
Letters to the Editor: 03/07/2014
Where was Snyder?; Time to fight back.Continued ...
Building Permits: 03/07/2014
Building permits issued in Grand Traverse County:Continued ...
Frankfort coach elected president of coach association
A pair of girls basketball victories and a regional championship weren’t the only things Tim Reznich won this week.Continued ...
McBain captures Class C regional title
McBain rebounded from a poor shooting performance in the first half to overtake Beaverton and secure a 61-44 decision Thursday in a Class C girls regional championship game.Continued ...
And the Oscar (contest) goes to ...
Holly MacAulay did her homework and it showed when she her Oscar contest entry landed among four with perfect scores.Continued ...
The Record: 03/07/2014
Assumed names issued in Grand Traverse County:Continued ...
Downtown boat ramp hits bump
A plan to redesign a Boardman River boat launch in Traverse City is temporarily grounded because some local environmentalists weren’t consulted about changes.Continued ...
Back to school — for parents
Traverse City area parents will have a chance to go back to kindergarten at Grand Traverse Academy on March 13.Continued ...
Former TC student teacher returns as singer-songwriter
Josh Rose found musical inspiration in some unusual places growing up on a sheep farm in Michigan’s Upper Peninsula.Continued ...
Weekend in Brief: 03/07/2014
"Pure A Cappella" showcase; Mel Larimer concert series continues; and more.Continued ...
NMC's Birmley Road observatory open to public tonight
Two realms of science fascinate all types of people, regardless of age, said Jerry Dobek, a science and math instructor at Northwestern Michigan College.Continued ...
Night Life Calendar: 03/07/2014
What's going on after dark:Continued ...
Sports in Brief: 03/07/2014
Coach Mike Krzyzewski is out of the hospital and at practice with No. 4 Duke after feeling light-headed during a loss at Wake Forest. (Plus more)Continued ...
Movie Capsules: 03/07/2014
New this week — 300: Rise of an Empire — Greek general Themistokles leads the charge against invading Persian forces led by mortal-turned-god Xerxes and Artemisia, vengeful commander of the Persian navy.Continued ...
Community in Brief: 03/07/2014
Mexican Dinner Party benefit; Titan Student Choreographed Dance Concert; Grand Traverse Humanists meet; A Matter of Honor (AMOH) event; and more.Continued ...
- Poll: Does state set aside enough money to test beaches?
- High School Sports Scoreboard: 03/07/2014