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Hostess To Shut Down After Failed Union Talks
A U.S. bankruptcy court accepted the request by giant U.S. bread and cake producer Hostess Brands Inc. to shut down due to a strike that has derailed its recovery plan, a move that means that some 18,500 workers will be laid off.
New York Bankruptcy Judge Robert Drain approved the firm’s request for an orderly closure of its operations and the sale of its assets, the firm said in a communique.
The judge’s decision came after the firm and the union that staged the walkout were unable to reach agreement during a mediation session requested last Monday by the magistrate.
Hostess will now close 33 bakeries, 565 distribution centers and 570 outlet stores all over the country and will sell its most famous brands.
The company, based in Irving, Texas, had declared a suspension of payments to suppliers for the second time last January to try and restructure its operations with an eye toward reducing its huge debt. It also blamed its inability to return to profitability on union wages and pension costs.
The bakery company’s iconic products include Twinkies, with which Hostess launched its operations in 1930, and Ding Dongs.
Several companies have already expressed an interest in buying some of the firm’s brands.
Published in Notitas de Noticias
2012-11-24 09:41:23
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Aren’t Unions grand? What deal could possibly be worse than not having a job at all?