WHITE PLAINS, N.Y. — Twinkies, Ho Hos and Wonder Bread are up for sale now that a bankruptcy judge cleared the way for Hostess Brands Inc. to fire its 18,500 workers and wind down its operations.
A last-ditch effort to end a strike with Hostess' bakers union failed Tuesday night, and Judge Robert Drain on Wednesday approved the company's request to shut down its business and sell the pieces to the highest bidder.
Hostess lawyers told Drain they needed to begin the liquidation process quickly to benefit from a surge in outside interest in its brands, including Hostess, Nature's Pride, Dolly Madison and Drake's.
Hostess, based in Irving, Texas, also wanted to shut down quickly because it has been spending about $1 million a day in payroll without any income since it halted operations.
The company will send termination notices to its employees Wednesday, said CEO Gregory Rayburn. “Those employees now need to look for work,” he said.
Hostess said it plans to retain about 3,200 employees to help with the initial phase of the wind down. The entire process should take about a year.
The snack maker's demise was years in the making. Management missteps, rising labor costs and changing tastes culminated in a crippling strike by The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.
At a glance
Hostess, founded in 1930, filed for Chapter 11 bankruptcy protection in January for the second time in less than a decade. Its predecessor company, Interstate Bakeries, sought bankruptcy protection in 2004 and changed its name to Hostess after emerging in 2009.