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: 12/06/2013
A roundup of prep sports results from across northern Michigan:Continued ...
Video: Community Tree Lighting
Watch Santa Claus arrive in Traverse City and help locals light the downtown tree tonight.Continued ...
Major snowmobile trail open after roadblock
A major snowmobile trail connecting Gaylord to westward northern Michigan trails will remain open, a shift of gears from state officials' prior closure announcement.Continued ...
How Grinchy Met The Who
Imagine “How the Grinch Stole Christmas” meets “Tommy,” sung and spoken entirely in rhyme.Continued ...
Contribute: Best Christmas light displays
We’re searching for the area’s best neighborhood Christmas light displays for an upcoming Northern Living story.Continued ...
Weekend in Brief: 12/06/2013
Christmas parody; Kalkaska Library cookie sale; Glass Mosaic Gallery open house; and more.Continued ...
Night Life Calendar: 12/06/2013
What's happening after dark across northern Michigan:Continued ...
Manistee celebrates season with reopened Vogue, Christmas Weekend
If you’ve never driven the 65 miles southwest to Manistee for the city’s Victorian Sleighbell Parade & Old Christmas Weekend there’s an extra reason to make the trip this year.Continued ...
OTP gets in the spirit with 'Wonderful Life'
Jill Beauchamp has watched the movie, “It’s a Wonderful Life,” every Christmas season since she was young.Continued ...
- Poll: Are you happy with results of Clinch Park makeover?
TCSF student gets equestrian scholarship from UT-Martin
Reiley Wilson is not unlike most high school athletes who aim to continue competing at the collegiate level.Continued ...
U-M to fix teen's broken heart
The University of Michigan stepped forward with a gift of open heart surgery for Nguyen Duyen, a Vietnamese exchange student who has lived under a cloud of uncertainty and stress for months.Continued ...
Editorial: TC obligated to recognize Indian villages at Clinch
The issue: Historic markers at Clinch ignore Anishinaabek people. Our view: Get it right.Continued ...
Letters to the Editor: 12/06/2013
Doesn’t make sense; Victims were helpless.Continued ...
Building Permits: 12/06/2013
Building permits issued in Grand Traverse County:Continued ...
Grand Traverse area lands state acquisition grants
Michigan natural resources officials recently decided it’s well worth $2.5 million to preserve about 8 acres on Old Mission Peninsula with beach access, an effort to keep the area from being turned into 10 lavish homes.Continued ...
The Record: 12/06/2013
Assumed names filed in Grand Traverse County:Continued ...
GT 911 downed by glitch
It wasn’t an emergency that rang Grand Traverse County’s 911 phone lines off the hook.Continued ...
Area receives state dollars for increased recreation
Local recreational areas will receive makeovers, courtesy of the state Department of Natural Resources.Continued ...
Top county official evaluated by board
Grand Traverse County commissioners saved some of their most critical words for each other during an annual evaluation of the county’s top employee.Continued ...
Girls Basketball Roundup: Titans drop opener
It wasn’t the best of starts for Traverse City West in Thursday’s girls basketball season opener against Grand Haven, but the Titans played the Buccaneers even the rest of the way in a 43-31 loss. (Plus more)Continued ...
Munson pharmacist awarded for pain management expertise
A professional state association recently honored a Munson Medical Center pharmacist for his expertise in pain management.Continued ...
Movie Capsules: 12/06/2013
New this week — All Is Lost: After a collision with a shipping container at sea, a resourceful sailor finds himself, despite all efforts to the contrary, staring his mortality in the face. Rated PG-13 for brief strong language. (GAR)Continued ...
Community in Brief: 12/06/2013
Torch Lake Association party; ISEA Great Lakes Seminar; and more.Continued ...
Clearing the Record: 12/06/2013
Because of a reporter’s error, Coldwell Banker was misspelled in a Thursday photo caption.Continued ...
- High school sports scoreboard: 12/06/2013