Image Source: CNN

BY ROBERT ABEL

ANCHOR ZACH TOOMBS 


We might be saying bye bye to Ho Hos, Twinkies and Ding Dongs. After a series of nationwide strikes the snack company Hostess has announced that it will liquidate the company if workers don’t return to work by Thursday evening. The Chicago Tribune reports.

“Members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike on Nov. 9 in response to court-approved pay cuts. The company, which has about 18,000 employees, filed for Chapter 11 bankruptcy in January.”

Union president Frank Hurt said in a statement Tuesday:

"Our members are on strike because they have had enough, they are not willing to take draconian wage and benefit cuts on top of the significant concessions they made in 2004 and give up their pension so that the Wall Street vulture capitalists in control of this company can walk away with millions of dollars."

The proposed pay cuts included salary cuts of 8% across the company in the first year of the five year agreement but will then increase 10% over the course of four years.

Hostess will also reduce pension obligations and health care plan contributions. CEO Greg Rayburn explains on Fox Business the incentives to the proposal.

“Unlike the last bankruptcy, because this is the second time through that process for hostess they’re getting 25% equity in the company... $100 million dollars of 3rd lien debt, two board seats and one seat on the comp committee”

Hostess announced today that bakeries in Seattle, St. Louis and Cincinnati will be closed as a result of the strike resulting in the loss of 627 jobs. If the company liquidates it will mean a loss of over 18,000 jobs. NBC reports

“Hostess said it would file a motion with U.S. Bankruptcy Court in White Plains, N.Y., on Friday to close shop and sell its assets if enough employees do not return to work by 5 p.m. Eastern time on Thursday. If the motion is granted, Hostess would begin to close its operations as soon as Nov. 20.”

Bloomberg News reports many of the strikers may be under a false impression that another company will buy out Hostess if they do decide to liquidate.

“The industry has ‘far too much capacity,’ … ‘I believe the leadership of the bakers union knows this fact, but is willing to sacrifice its Hostess employees for the sake of preventing other bakery companies from asking for similar concessions’.”


And according to The New York Times, the company says its problems aren’t rooted in its debt to its shareholders but have more to do with its labor union obligations.

"The main problem the company faces is debts owed to current and former employees under various union contracts. The company has already moved to terminate its collective bargaining agreement.”


The company currently has $850 million of secured outstanding debt and more than $180 million in accrued workers compensation liabilities yet only has just over $980 million in assets #####

Hostess May Liquidate if Bakers' Strike Continues

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Nov 14, 2012

Hostess May Liquidate if Bakers' Strike Continues

Image Source: CNN

BY ROBERT ABEL

ANCHOR ZACH TOOMBS 


We might be saying bye bye to Ho Hos, Twinkies and Ding Dongs. After a series of nationwide strikes the snack company Hostess has announced that it will liquidate the company if workers don’t return to work by Thursday evening. The Chicago Tribune reports.

“Members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike on Nov. 9 in response to court-approved pay cuts. The company, which has about 18,000 employees, filed for Chapter 11 bankruptcy in January.”

Union president Frank Hurt said in a statement Tuesday:

"Our members are on strike because they have had enough, they are not willing to take draconian wage and benefit cuts on top of the significant concessions they made in 2004 and give up their pension so that the Wall Street vulture capitalists in control of this company can walk away with millions of dollars."

The proposed pay cuts included salary cuts of 8% across the company in the first year of the five year agreement but will then increase 10% over the course of four years.

Hostess will also reduce pension obligations and health care plan contributions. CEO Greg Rayburn explains on Fox Business the incentives to the proposal.

“Unlike the last bankruptcy, because this is the second time through that process for hostess they’re getting 25% equity in the company... $100 million dollars of 3rd lien debt, two board seats and one seat on the comp committee”

Hostess announced today that bakeries in Seattle, St. Louis and Cincinnati will be closed as a result of the strike resulting in the loss of 627 jobs. If the company liquidates it will mean a loss of over 18,000 jobs. NBC reports

“Hostess said it would file a motion with U.S. Bankruptcy Court in White Plains, N.Y., on Friday to close shop and sell its assets if enough employees do not return to work by 5 p.m. Eastern time on Thursday. If the motion is granted, Hostess would begin to close its operations as soon as Nov. 20.”

Bloomberg News reports many of the strikers may be under a false impression that another company will buy out Hostess if they do decide to liquidate.

“The industry has ‘far too much capacity,’ … ‘I believe the leadership of the bakers union knows this fact, but is willing to sacrifice its Hostess employees for the sake of preventing other bakery companies from asking for similar concessions’.”


And according to The New York Times, the company says its problems aren’t rooted in its debt to its shareholders but have more to do with its labor union obligations.

"The main problem the company faces is debts owed to current and former employees under various union contracts. The company has already moved to terminate its collective bargaining agreement.”


The company currently has $850 million of secured outstanding debt and more than $180 million in accrued workers compensation liabilities yet only has just over $980 million in assets #####

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