Goodbye Hostess

Tyler Durden's picture

Everyone loses:

  • HOSTESS JUDGE APPROVES MOTION TO WIND DOWN COMPANY
  • HOSTESS WINS APPROVAL TO CLOSE AND BEGIN SELLING ASSETS

Next up: the Twinkie economy.

Fom Leveraged Loan:

U.S. Bankruptcy Judge Robert Drain this afternoon approved Hostess Brands’ emergency wind-down plan, as well as an amendment to its debtor-in-possession credit agreement that will allow Hostess to access the full amount of its $75 million DIP loan during its liquidation.

Drain also denied a motion filed by the U.S. Trustee to convert the case to Chapter 7, though he did not rule out the prospect of a conversion at a later date.

Hostess returned to the bankruptcy courthouse in White Plains, N.Y., this morning after a last-minute mediation yesterday between the company and its main bakers’ union failed to produce a settlement to halt liquidation of its assets. The hearing began Monday afternoon, but was delayed shortly thereafter to give the company and the Bakery, Confectionary, Tobacco and Grain Millers Union a final opportunity to engage in mediation to avert the strike the BCT began last week. But by Tuesday evening, Hostess announced that the mediation was “unsuccessful.”

Judge Drain opened today’s hearing with a brief, private chambers conference to discuss the mediation, the details of which remain confidential.

Back in open court, Hostess financial advisor Joshua Scherer, of Perella Weinberg, took the witness stand to discuss the company’s failed efforts to sell the company as a whole, and the status of its newly launched liquidation strategy.

During its Chapter 11, Hostess fielded six bids for the sale of the company as a whole, none of which passed muster, Scherer said.

In the past five days, however, since Hostess officially launched its liquidation process, the company has received “a flood of inquiries,” said Hostess lawyer Heather Lennox, of Jones Day. The company expects to file a number a number of stalking-horse bids for its assets within the next few weeks, she said.

“The number of inbound calls has been surprising, on a number of fronts,” Scherer said. Those inquiries fall into four “buckets,” he explained. Offers have come from regional bakeries, national competitors, customers (such as Wal-Mart, Kroger and Giant Eagle), and a fourth catch-all category, including large consumer products companies. Scherer said the liquidation sale has generated “very significant interest” from international buyers as well.

Many of the buyers were uninterested in the assets when Hostess was weighed down by its union liabilities, he said. “We have very significant momentum right now with, from a selling perspective, positive press,” Scherer said. “It’s critical to maintain momentum and a competitive dynamic.”

“Every day our product is off the shelf, it’s diminishing in value. Our customers get used to selling goods without our brands, and the end-users learn to live without Twinkies and Wonder Bread.”

On the stand, Hostess CEO Gregory Rayburn said he needs to terminate about 15,000 employees today so that they can collect unemployment benefits. Drain approved an employee retention plan that would keep about 3,200 employees on the job during the wind-down process.

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bigdumbnugly's picture

goodbye hostess

hello john galt

Shocker's picture

Sucks to see, either way. Another company down the tubes.

http://www.dailyjobcuts.com

.

ZerOhead's picture

Hostess is Toastess...

Their junk (food) bonds are going to get monkey hammered.

economics9698's picture

Obama, Obama, gimmie a free cell phone.  Obama give me a free cell phone.

strannick's picture

Next up, the twinkie economy

Cant print twinkies

Kali's picture

Ahh, but they will print you a "Certificate of Twinkie"  that is worth one twinkie.

tmosley's picture

"Everyone loses"

Except for those with enough foresight to stockpile Twinkies.  Idiots shop on Ebay, bitchez.

DaveyJones's picture

the bankruptcy judge's name is drain.

Cheesy Bastard's picture

Well, the parasites have killed their Hostess.

cranky-old-geezer's picture

 

 

They'll print Federal Twinkie Notes that aren't redeemable for twinkies or anything else, and they'll backed by "the full faith and credit of the US govt".

Frozen IcQb's picture

Anybody interested in taking a long position in Twinkies deliverable futures?

Apparently JPM is on the short side and their vault is filled with them.

ZerOhead's picture

Did I say monkey hammered?

I meant Ding Donged...

Mr Lennon Hendrix's picture

We don't need corporations just like we don't need government.

Go make your own damn twinkees.

spastic_colon's picture

Why does this seem like a stealth Michele O assault on American choice....no one is forcing hostess products down our throats....no more large big gulps and now twinkies etc. this is getting stupid

LetThemEatRand's picture

"Indeed. Atlas shrugged."

Exactly right.  A company that made chemical food that no one needed.  Management that paid itself hundreds of millions to run a company into bankruptcy over a period of years, while bitching that workers made too much.  And a brand that will live on to make more worthless management types money in the future, while the workers and bondholders of the old company lose everything.  A few at the top prevail and everyone else gets fucked.  Pretty much exactly what Ayn Rand teaches us is the desired model of human interaction.

eatthebanksters's picture

Amazing that your ideaology doesn't get in the way of your facts...have a twinkie!

LetThemEatRand's picture

Amazing that your ideology does not require any facts at all in order to criticize mine ... have a ding dong!

Marc45's picture

A chemical no one needed?  This is not about need but want.  Consumers wanted twinkies so Hostess made them.

Why would management run the company into the ground on purpose?  The real travesty is that an "unecessary" union brought down a company that employed thousands of workers, many who probably live paycheck to paycheck.  They're all screwed now.

Unions don't need to exist.  We have OSHA and plenty of labor laws.  There are no sweatshops or child labor factories in the US.  The only thing unions are doing is sucking money out of your paycheck and extorting businesses to pay more or else they strike.

When you have every business in the country paying everything they make to the workers you have...communism.  The beauty of this country is you can form a union, you can strike and you can fire all your workers and go out of business if you want.

LetThemEatRand's picture

"Why would management run the company into the ground on purpose?"

Of course they did not, or at least I have no reason to suspect they did.   But where is the outrage from your political side of the equation at the system that allows management in cases like this to walk away with millions?  What did they do to earn their money?   If you believe in the free market, why do you support a system where management has zero exposure to loss created even by their own incompetence?   And if you think that is just the spoils of being the "productive class" (whether you are productive or not), why do you not support the idea that workers want their own spoils?   Isn't it part of being free that a wage earner can enter into agreements with other wage earners to achieve the objective of making more money?  Do you advocate a caste system where CEOs can milk every last dime and laugh as they leave the burning building, but workers must dutifully take whatever is offered to them?

Midas's picture

If you guys are going to feed the troll, you should bring enough twinkies for everyone.

marty.mcfly's picture

There was a chance for someone like "LetThemEatRand" to come in and purchase the company before they filed for bankruptcy.  This would have been the perfect oportunity for a liberal businessman to buy up Hostess and run the company "for the workers."  Guess what?  There is no such thing as a liberal businessman.  Everyone that looked at the books noticed the union liabilities and knew it couldn't be done!

A Nanny Moose's picture

"If you believe in the free market, why do you support a system where management has zero exposure to loss created even by their own incompetence?"

 

This is the result of The Corporation, a legal fiction created by government. This is NOT the free market.

Tator's picture

But where is the outrage from your political side of the equation at the system that allows management in cases like this to walk away with millions? 

 

Troll hypocracy  on display.

 

So fair play.

 

But where is the outrage from your political side of the equation at the system that allows union leaders in cases like this to walk away with millions? 

Tator's picture

But where is the outrage from your political side of the equation at the system that allows management in cases like this to walk away with millions? 

 

Troll hypocracy  on display.

 

So fair play.

 

But where is the outrage from your political side of the equation at the system that allows union leaders in cases like this to walk away with millions? 

Lord Koos's picture

Obviously not enough people wanted Hostess products or the company would still be around...   Bad financial choices, bad food, and bad management - but somehow it's all the workers' fault?  I think not. 

redpill's picture

False equivalency.  The top executives and their compensation are approved by the board (for better or for worse), which represents those that actually OWN the company.  The union does not own the company.  The union doesn't own shit.  So don't sit there and pretend that a union boss that doesn't produce ANYTHING has any claim on making decisions in a company he doesn't own.  Workers were crossing the line to keep Hostess open under threat of union fines, and still the union wouldn't budge.  Maybe the executives were overpaid, maybe they weren't.  Maybe they were total incompetant assholes, maybe they weren't.  That's up to the ownership and the board, not anyone else.  This fucked up morality where people believe that once they get paid to make fucking TWINKIES for someone means they should have a say in how the company is run is ri-goddamn-diculous. 

You know what I did the last time I had a job where I felt the situation was unfair?  I quit and found a different job.  If you're worth two shits, that is what you do.  This whiny shit where you bring down the organization through unrealistic collective demands is, and has always been, the most myopic retarded invention in the modern economy.

cranky-old-geezer's picture

 

 

A company that made chemical food that no one needed.

I suspect we could get by ok without unions too.

Ident 7777 economy's picture

Hoisted on his own petard.

Exquisite.

Lord Koos's picture

Sure -- Walmart workers are "getting by" just fine.

A Nanny Moose's picture

Last I check, Walmart workers still had jobs.

Lord Koos's picture

It's not "everybody loses", it's only the suckers that lost.  The people at the top did not lose.

Dangertime's picture

"

Exactly right. A company that made chemical food that no one needed. Management that paid itself hundreds of millions to run a company into bankruptcy over a period of years, while bitching that workers made too much. And a brand that will live on to make more worthless management types money in the future, while the workers and bondholders of the old company lose everything. A few at the top prevail and everyone else gets fucked. Pretty much exactly what Ayn Rand teaches us is the desired model of human interaction."

 

Answer:  I wonder why Management doesn't need to form a union?  Oh right, because they earn their position.  None-the-less, it is rather disingenuous for you to support truck drivers earning $125,000 a year.  Is that the new middle class?  If so, it's only because of the Obama-bucks being printed all over the country.

TheFourthStooge-ing's picture

To the tune of Supertramp's Goodbye Stranger:

On the day before Thanksgiving,
The doors were closed for good
At the factories that made things
Analogous to food.

Like a cupcake with no filling,
Like an empty cherry pie,
Like a Donner Party dinner,
The carcass was bled dry.

Left with worthless equity shares,
The employees were all sacked,
And Twinkie the Kid
Was shot square in the back.

Goodbye Ding Dongs, Ho-Hos too,
Off to Ebay, sold to fools.
Stalking horse bids, judge, trustee,
Move along folks, nothing to see.

Goodbye Hostess Wonder Bread.
Piss poor management left you dead.
Union bosses raped you raw.
Exec bonuses: coup de grace.

BLOTTO's picture

Queue in 5 pages of cream-filled sarcasm...

.

Twinkie: Enriched wheat flour, sugar, corn syrup, niacin, water, high fructose corn syrup, vegetable and/or animal shortening – containing one or more of partially hydrogenated soybean, cottonseed and canola oil, and beef fat, dextrose, whole eggs, modified corn starch, cellulose gum, whey, leavenings (sodium acid pyrophosphate, baking soda, monocalcium phosphate), salt, cornstarch, corn flour, corn syrup, solids, mono and diglycerides, soy lecithin, polysorbate 60, dextrin, calcium caseinate, sodium stearoyl lactylate, wheat gluten, calcium sulphate, natural and artificial flavors, caramel color, yellow No. 5, red #40.[10]

ZerOhead's picture

The loss will surely be felt most acutely at America's obesity clinics.

This could be the Straw(berry cupcake) that breaks the Ca(ra)mel (HoHo)s back.

duo's picture

and delivered by $125K a year union truck drivers.

Drachma's picture

You forgot to add that the soybean, cottonseed, canola, corn and wheat are genetically modified. The damn thing has more corn in it than corn! High-fructose Cornkie.

Metalredneck's picture

Suddenly, I'm nauseous...

Abiotic Oil's picture

You're not supposed to post the recipe for Zyklon B on a public forum like that.

Dawnofinsanity's picture

Is it too late to sell my futures in Yellow No. 5, red #40 and processed corn products? 

Wouldn't be surprised if the actuaries for Obamacare ran the math on the cost of 15,000 more going onto employee insurance vs the cost of sugar addicted people who keep bombarding themselves with cancer causing ingredients.     

GrinandBearit's picture

Being and ex-food scientist I can tell you with certainty that the amount of yellow#5 and red#40 are less than 0.001%.  A small amount of artificial color goes a long way.  It's just not worth owning futures in art colors -lol

A Lunatic's picture

Yellow slime..........

eatthebanksters's picture

What's truly amazing is that it goes in one end as a twinkie and comes out the other as a Ho Ho...

slaughterer's picture

Fuck it, SLAUGHTERER INDUSTRIES will buy Hostess.  I will have my lawyers and pitchteam submit my BID this weekend.