Hostess expects to split up snack cakes in sale

Published on NewsOK Modified: December 21, 2012 at 1:51 pm •  Published: December 21, 2012
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To begin winding down its operations late last month, Hostess had said it would retain about 3,000 workers to shutter plants and perform other tasks. On Friday, an attorney for Hostess said in court that figure was down to about 1,100 employees. The liquidation of Hostess ultimately means the loss of about 18,000 jobs, not including those shed in the years leading to the company's failure. CEO Greg Rayburn, who was hired as a restructuring expert earlier this year, is earning $125,000 a month.

The company's demise came after years of management turmoil and turnover, with workers saying the company failed to invest in updating its snack cakes and breads. Hostess filed for its second Chapter 11 bankruptcy in less than a decade this January, citing steep costs associated with its unionized workforce.

The company was able to reach a new contract agreement with its largest union, the Teamsters, the bakers union rejected the terms and went on strike Nov. 9. A week later, Hostess announced its plans to liquidate, saying the strike crippled its ability to maintain normal production. Although Hostess sales have been declining over the years, they still clock in at between $2.3 billion and $2.4 billion a year.

When asked how much the brands are expected to fetch from buyers, Scherer said he would rather not say.

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Follow Candice Choi at www.twitter.com/candicechoi



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