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.
Prep Sports Scoreboard: 04/11/2014
A roundup of prep sports results from across northern Michigan:
GT Academy founder faces bank fraud, tax evasion charges
Grand Traverse Academy co-founder Steven Ingersoll faces federal charges of conspiracy to commit bank fraud and tax violations, accusations that publicly surfaced about a month after the school severed ties with his management company.Continued ...
Editorial: Recent BATA changes put accountability first
The Bay Area Transportation Authority is undergoing some needed accountability changes that should improve service to some while rewarding others for playing by the rules.Continued ...
TCL&P resists coal dock pressure
Traverse City Light & Power board members withstood heavy lobbying and allegations of closed-door maneuvering from influential local groups to place the $2.68 million coal dock property’s future in the hands of the city’s elected representatives.Continued ...
New zombie flick set in northern Michigan
Most days Brian Dawson is a mild-mannered veterinarian. Others he’s a flesh-eating zombie.Continued ...
Derrer to play at Syracuse
Dakota Derrer won’t have to be one of the boys anymore. But now she’ll have to resist the urge to hit like one.Continued ...
Career Kickstart kicks off today
Job seekers can get free professional clothing and lots of advice on resumes and interview skills at an event today at Northwestern Michigan College.Continued ...
High schools among most challenging in U.S., state
Local students have the opportunity to attend two of the most challenging high schools in the nation, based on the Washington Post’s annual rankings.Continued ...
School gets ATM
TBA Credit Union installed an automated teller machine at Traverse City West Senior High School.Continued ...
Letters to the Editor: 04/11/2014
Enabling the homeless.Continued ...
TBAYS set to celebrate silver anniversary
Fred Haines had a vision. He also had passion and determination. And on any given day in the spring or fall, if you gaze out at the expanse of soccer fields at the Keystone Road Soccer Complex and see hundreds of kids kicking balls around, you are able to see it all spring to life.Continued ...
NMC administrator off to China for student recruitment
A Northwestern Michigan College administrator is off on another trip to China with hopes of recruiting high school students from Beijing to enroll at NMC their senior year.Continued ...
The Record: 04/11/2014
Assumed names filed in Grand Traverse County:Continued ...
Life after 'The Voice': Maloney out but not down following cut
Ryan Whyte Maloney is out but he isn’t down. The Traverse City native and “The Voice” contestant was cut from the show Tuesday after making it to the top 20 on Monday.Continued ...
Forum: TC can't get bed tax, visitors centers can
I am writing to comment on the March 29 Another View: “Local tax a local windfall” about Franklin County in New York state seeking state approval to impose a bed tax on hotels and motels in that county, and your Online Poll question asking readers whether such a tax is a good idea.Continued ...
Kalkaska's Will Noble headed to the next level
This season Will Noble took his game to another level. That’s allowed him to take his game to the next level.Continued ...
Building Permits: 04/11/2014
Building permits issued in Grand Traverse County:Continued ...
Saturday festival all about dirt and Earth
Mara Penfil likes dirt. She likes to remind people that leaves fall from trees and turn into dirt, mushrooms grow in dirt, all kinds of organisms make a home in dirt.Continued ...
Bums add Wrenn, Rossi to infield
The Traverse City Beach Bums added to an already fairly loaded infield by signing shortstop Taylor Wrenn and infielder Drew Rossi.Continued ...
Weekend in Brief: 04/11/2014
Celebration for Pete Seeger; OTP Studio Theatre stages police drama; Dirt Fest; and more.Continued ...
Prep Sports Roundup: Morgan, Cvengros pitch Glads to sweep
Gabby Morgan pitched a two-hit shutout as St. Francis blanked Benzie Central 10-0 in the opener of a non-league doubleheader Thursday. (Plus more)Continued ...
Movie Capsules: 04/11/2014
New this week — Draft Day: At the NFL Draft, general manager Sonny Weaver has the opportunity to rebuild his team when he trades for the number one pick. He must decide what he’s willing to sacrifice on a life-changing day for a few hundred young men with NFL dreams. Rated PG-13 on appeal for brief strong language and sexual references. (HOR)Continued ...
Forestry experts gear up to fight next deadly beetle
Michigan foresters fear the sight of a black beetle with white spots.Continued ...
Grand Rapids band feels 'at home' in TC
Members of Grand Rapids’ Sweet J Band consider Kilkenny’s Irish Public House in Traverse City their home away from home.Continued ...
Night Life Calendar: 04/11/2014
Entertainment in the region:Continued ...
- Prep Sports Scoreboard: 04/11/2014