"Hostess May Avoid Bankruptcy"
CNBC and Reuters are reporting that Hostess and the bakers’ union have agreed to mediation, avoiding bankruptcy for the maker of Twinkies and Ho Hos. Bargaining will begin tomorrow, but if the talks don’t produce an agreement, liquidation will go forward on Wednesday.
Hostess announced last week that it will go out of business, arguing that disputes with striking union workers are forcing the company out of business. On Monday, at a hearing on Hostess’ request to begin shutting down, a bankruptcy judge “asked whether he should preside over mediation” between the two parties.
Hostess had planned to request that the judge approve a plan that would have allowed it to pay $1.75 million in bonuses to 19 of its executives, who had already received pay raises earlier this year. Bankruptcy could result in “the firing of thousands of employees” and would force the company “to shut down 36 bakeries, 242 depots, 216 retail stores, and 311 hybrid depot-store facilities.”