The maker of Wonder Bread and Twinkies has filed for bankruptcy protection under Chapter 11. While certainly I am concerned about the jobs which may be lost if the company were to fail to emerge from bankruptcy, this story highlights a more pressing issue ----- companies (and people and communities) need to KEEP UP WITH CHANGING TIMES or risk becoming irrelevant. Communities have to evolve and plan for change --- change can NOT be avoided .. it must be anticipated, planned for, prepared for and allowed to unfold. Certainly, it is much better to be flexible and prepared for change than to put your head in the sand and just hope it goes away or doesn't happen.
Personally, I never like Wonder Bread (my family preferred Freihoffer's Bread and breads made from local bakeries including the former White Eagle Bakery or more recently fresh baked breads from Foods & Frostings in Glenville) and I was never a fan of twinkies (or similar products from Hostess' competitors). It has been at least 35 years ago since I had a twinkie. One of my younger brothers and his best friend used to buy twinkies every day on our walk home from elementary school --- I personally preferred Mallo Cups or Reese's Peanut Butter Cups as my after school snack/indulgence.
Twinkies Maker Hostess Files for Chapter 11 Protection
By JACQUELINE PALANK, MIKE SPECTOR and JULIE JARGON
Hostess Brands Inc. filed for Chapter 11 bankruptcy protection Wednesday to confront burdensome debt and labor costs that the Twinkies and Wonder Bread baker says have left it fighting to compete.
Twinkies and Wonder Bread maker Hostess Brands Inc has filed for Chapter 11 bankruptcy protection, struggling under the weight of debt and soaring labor force expenses. (Photo: Getty Images)
The privately held Irving, Texas, company's move marks the second significant court restructuring in the past several years. In a statement, Hostess said the current cost structure "is not competitive, primarily due to legacy pension and medical benefit obligations and restrictive work rules." It said it would be able to maintain operations thanks to a $75 million financing commitment from a group of lenders.
Hostess Bankruptcy Document
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Paul J. Richards/Agence France-Presse/Getty Images More photos and interactive graphics In bankruptcy, Hostess said it plans to continue negotiating with 12 unions to modify the collective-bargaining agreements governing the employment of its union workers, who comprise 83% of its approximately 19,000 employees.
"Whether the debtors can achieve long-term viability depends directly and substantially on the debtors' ability to achieve dramatic change to their labor agreements, with a corresponding material reduction in their cost structure and legacy pension and medical obligations, and a restructuring of their capital structure," Hostess said in court papers. "That is the purpose and the focus of these Chapter 11 cases."
If Hostess can't obtain voluntary modifications to the labor agreements, it said it would ask the U.S. Bankruptcy Court in White Plains, N.Y., to let it reject the agreements altogether.
"We remain hopeful that we can reach an agreement that will allow us to amend our labor contracts so that we can emerge from Chapter 11 as a highly competitive company that provides secure jobs for our employees," President and Chief Executive Brian Driscoll said in the statement.
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Bloomberg News The Wonder Bread maker will continue to operate while restructuring.
The majority—nearly 92%—of Hostess' union employees belong to one of two unions: the International Brotherhood of Teamsters or the Bakery, Confectionery, Tobacco Workers & Grain Millers International Union.
"While no agreement has been reached to date, the Teamsters Union remains committed to working with all stakeholders during the bankruptcy to find a mutually agreeable solution, if possible," said Dennis Raymond, director of the Teamsters Bakery and Laundry Conference, in a statement.
The 82-year-old company said it plans to continue operating while it restructures, to which end it secured a commitment for $75 million in bankruptcy financing from a group of its existing lenders led by Silver Point Capital LP. The loan is subject to court approval.
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Hostess Brands is preparing to file for bankruptcy protection. Shira Ovide joins Markets Hub to discuss a brief history of the company that gave the world Twinkies and Wonder Bread.
WSJ's Mike Spector checks in on Mean Street to take a look at Hostess's Chapter 11 filing and the impact of labor costs on the company. Photo: PAUL J. RICHARDS/AFP/Getty Images.
Hostess's filing marks what is known as a Chapter 22 proceeding in restructuring circles, since it had already sought bankruptcy protection once before. Hostess, which in court papers reported $1.4 billion in debt as of Dec. 10, has struggled since emerging from bankruptcy proceedings in February 2009.
It has tried to find a white knight that would buy the company outright or take individual businesses, to no avail.
Hostess said in its filing that its biggest unsecured creditor is the Bakery & Confectionary Union & Industry International Pension Fund, which it owes about $944 million.
The company's private-equity owner, Ripplewood Holdings, invested $40 million in Hostess last year. Hedge funds Monarch Alternative Capital, Silver Point Capital and others loaned the company $20 million late last year.
"Ripplewood rescued Hostess from potential liquidation after a 4 1/2 year bankruptcy process resulting in saved jobs and brands," Ripplewood spokesman Jeffrey Taufield said Wednesday. "Ripplewood accomplished this by forming a partnership with labor that included providing the company's union employees with meaningful ownership in the business. Ripplewood continues to have confidence in Hostess' future and believes that through this re-organization process Hostess will re-emerge and be successful."
Hostess, previously called Interstate Bakeries Corp., reported $981.6 million in assets as of Dec. 10. It operates 36 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the U.S.
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Bankruptcy Beat: Pension, Health Funds Top Creditor List Deal Journal: Details From Bankruptcy Filing Earlier: Hostess Tries to Lengthen Shelf Life Earlier: Twinkies Maker Preparing for Chapter 11 Filing Deal Journal: A brief history of Hostess Teamsters Statement CFO Journal: Multi-Employer Pension Plans Strained Hostess Sales of its signature Twinkies have declined a bit recently while the overall bakery-snacks category has been about flat. Nearly 36 million packages of Twinkies were sold in the year ended Dec. 25, down almost 2% from a year earlier, according to data from SymphonyIRI Group, a Chicago-based market-research firm. The data captures sales from supermarkets, drugstores, mass-market retailers and convenience stores, but exclude sales from Wal-Mart Stores Inc. and club stores.
Hostess has kept prices relatively high, making it harder to charge even more as costs for ingredients and fuel rose.In the 1960s and 1970s, the company grew by acquiring several other baking outfits across the U.S. By 1995, the company had changed its name to IBC, and purchased its largest rival, Continental Baking Co., for $330 million, maker of Wonder Bread.
Hostess has hired law firm Jones Day to represent it in its bankruptcy, which The Wall Street Journal reported was expected this week. The company also hired Perella Weinberg Partners as its investment banker.
Hostess's workers have their own top-shelf restructuring advisers negotiating on their behalf. Matthew Feldman, a bankruptcy lawyer at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters, said people familiar with the matter.
Messrs. Feldman and Wilson, who have been advising the Teamsters since last summer, also worked together on President Barack Obama's auto task force during the government's rescue of General Motors and Chrysler.
Write to Jacqueline Palank at jacqueline.palank@dowjones.com, Mike Spector at mike.spector@wsj.com and Julie Jargon at julie.jargon@wsj.com
George Amedore & Christian Klueg for NYS Senate 2016 Pete Vroman for State Assembly 2016[/size][/color]
"For this is what America is all about. It is the uncrossed desert and the unclimbed ridge. It is the star that is not reached and the harvest that is sleeping in the unplowed ground." Lyndon Baines Johnson
who the hell eats twinkies any more.. are they really food? i have seen zombie movies where they poke fun of twinkies as the food that last longer than the apoyalpse, and certainly longer than GB's hair...
who the hell eats twinkies any more.. are they really food? i have seen zombie movies where they poke fun of twinkies as the food that last longer than the apoyalpse, and certainly longer than GB's hair...
I was surprised to see a piece on tv that actually said that Twinkies were NOT as unhealthy as some people think (at least that is what the reporter claimed) and cited that a Twinkie has only 150 calories.
The bigger issue for Hostess is that it has never really tried to grow beyond the Wonder Bread and Twinkie product lines ----- other companies have diversified ... for example Smucker's makes jellies and jams but also owns Folger's Coffee and several other food product lines.
George Amedore & Christian Klueg for NYS Senate 2016 Pete Vroman for State Assembly 2016[/size][/color]
"For this is what America is all about. It is the uncrossed desert and the unclimbed ridge. It is the star that is not reached and the harvest that is sleeping in the unplowed ground." Lyndon Baines Johnson
The fact that twinkies and other hostess products last forever and are cheap are the main reasons why folks buy them.
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
Not behind -- I just refuse to respond on a thread that was clearly an attempt at cyber bullying.
George Amedore & Christian Klueg for NYS Senate 2016 Pete Vroman for State Assembly 2016[/size][/color]
"For this is what America is all about. It is the uncrossed desert and the unclimbed ridge. It is the star that is not reached and the harvest that is sleeping in the unplowed ground." Lyndon Baines Johnson
Not behind -- I just refuse to respond on a thread that was clearly an attempt at cyber bullying.
YOU ARE THE EXPERT ON THAT TOPIC (see below)....but my post was humor based and far from it!
Cyber bullying can take many forms. However, there are six forms that are the most common.* •Harassment: Repeatedly sending offensive, rude, and insulting messages - YOU DO THAT •Denigration: Distributing information about another that is derogatory and untrue through posting it on a Web page, sending it to others through email or instant messaging, or posting or sending digitally altered photos of someone - YOU DO THAT •Flaming: Online "fighting" using electronic messages with angry, vulgar language - YOU DO THAT •Impersonation: Breaking into an email or social networking account and using that person's online identity to send or post vicious or embarrassing material to/about others.- YOU DON'T DO THAT •Outing and Trickery: Sharing someone's secrets or embarrassing information, or tricking someone into revealing secrets or embarrassing information and forwarding it to others - YOU DO THAT •Cyber Stalking: Repeatedly sending messages that include threats of harm or are highly intimidating, or engaging in other online activities that make a person afraid for his or her safety (depending on the content of the message, it may be illegal) - YOU DO THAT
JUST BECAUSE SISSY SAYS SO DOESN'T MAKE IT SO...BUT HE THINKS IT DOES!!!!! JUST BECAUSE MC1 SAYS SO DOESN'T MAKE IT SO!!!!!
i think talking about twinkies constitutes as cyberbullying
^5
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
The bigger issue -- and the ONLY ISSUE -- that I am focusing on -- is the inability of Hostess to diversify and keep up with the times. The same commentary could be made about Kodak which is also close to filing for Chapter 11 bankruptcy.
George Amedore & Christian Klueg for NYS Senate 2016 Pete Vroman for State Assembly 2016[/size][/color]
"For this is what America is all about. It is the uncrossed desert and the unclimbed ridge. It is the star that is not reached and the harvest that is sleeping in the unplowed ground." Lyndon Baines Johnson
maybe there's a twinkie app....oh wait.....there is.....it's the one that tells you what NOT to eat if one is so inclined to diet/regulate their food intake via knowledge.....
...you are a product of your environment, your environment is a product of your priorities, your priorities are a product of you......
The replacement of morality and conscience with law produces a deadly paradox.
STOP BEING GOOD DEMOCRATS---STOP BEING GOOD REPUBLICANS--START BEING GOOD AMERICANS
People have been given a lot of misinformation about what food is "healthy" and what food is "unhealthy". Some would have us believe that a McDonald's or Burger King hamburger or a hamburger of any kind is "unhealthy" but a salad with dressing is "healthy" ------- yet some salad dressings are high in fat, calories and sugar ...add croutons and you add salt and fat and calories .... have Caesar dressing or similar creamy dressing and you add fat, calories and salt.
The keys to healthy eating are buy FRESH -- WHOLE foods ... avoid the processed foods. Get as close to 9 servings of vegetables and fruits each day (6 of those serving being vegetables and 3 being fruit) --- and don't deprive yourself .... if there is a "special treat" that you enjoy plan it into your weekly menu and enjoy it in moderation.
George Amedore & Christian Klueg for NYS Senate 2016 Pete Vroman for State Assembly 2016[/size][/color]
"For this is what America is all about. It is the uncrossed desert and the unclimbed ridge. It is the star that is not reached and the harvest that is sleeping in the unplowed ground." Lyndon Baines Johnson
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