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Entries in Liquidation (4)

Tuesday
Nov202012

Hostess Union Mediation Fails; Company to Proceed with Liquidation Plans

Justin Sullivan/Getty Images(NEW YORK) -- It appears the company that makes Twinkies and Wonder Bread will close after all. Hostess says its mediation to reach a new labor agreement with its bakery workers failed and it will move ahead with liquidation plans.

On Monday, Judge Robert D. Drain of the Federal Bankruptcy Court for the Southern District of New York pushed Hostess and its workers to reach an agreement with the help of a mediator to save the jobs of more than 18,000 employees. The company said last week that it would wind down operations after bakery workers decided to continue their strike that began Nov. 9.

By Tuesday evening, Hostess announced the last-ditch mediation had failed. Now the folks who make the popular snack brands will lose their jobs.

The brands could survive under another baker, however. Other companies could step in and by some of Hostess' most famous brands such as Twinkies.  According to the New York Times, Flower Foods and Grupo Bimbo, the world's largest bread baker, are two potential buyers.

Many of the union workers are angry their negotiators didn't accept something that might have saved their jobs. Chris Schiaffarelli worked as a truck driver at the Hostess plant in Elmsford, NY. He's a Teamster, but he says the bakers union had a lot of guts in this dispute.

"The bakers union showed a lot of guts standing up for what they believe because although I'm a Teamster, I know we narrowly passed this latest contract, and I did not want it and I don't believe anybody wanted it," Schiaffarelli said of the contract negotiations Hostess settled with the Teamsters in September. "I know the drivers that I worked with on the last contract had sacrificed greatly. We gave $110 back on our base salary, paid $30 into our benefits."

After 22 years working for Hostess, Schiaffarelli says he's worried about finding another job in this economy.

"I've been working for Hostess for 22 years, and it's definitely devastating to find out that you're unemployed after so long," he said. "I'm 51 years old currently, and I currently just feel … it's going to be difficult."

Now the company plans to continue with a hearing scheduled for Wednesday morning in which Judge Drain will decide if the company can liquidate its assets.

Copyright 2012 ABC News Radio

Friday
Nov162012

Twinkies Maker Will Close After Strike

Justin Sullivan/Getty Images(IRVING, Texas) -- Hostess Brands Inc., the maker of the iconic snack Twinkies, announced Friday morning that it will liquidate the entire company because not enough striking employees returned to work by a Thursday evening deadline set by the company.

"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," Hostess CEO Gregory Rayburn said in a statement.  "Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders."

Hostess said it will seek bankruptcy court permission to close its business and sell its assets, "including its iconic brands and facilities."

The company said "bakery operations have been suspended at all plants," but already-baked products will continue to be delivered and sold.

On Wednesday, Rayburn said in a statement that "if sufficient employees do not return to work by 5 p.m., EST, on Thursday to restore normal operations, we will be forced to immediately move to liquidate the entire company."  The deadline came and went without enough striking workers returning.

The strikes began on Nov. 9, when Hostess imposed a contract that would cut workers' wages by eight percent.  The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) said the contract would also cut benefits by 27 to 32 percent.

Hostess, which is privately owned by two hedge funds, has struggled in recent years with two bankruptcy filings.  The company said it "has done everything in its power to pursue a reorganization of its business as a going concern, including spending the better part of 18 months negotiating with its key constituents to obtain a consensual agreement."

"It is now up to Hostess' BCTGM-represented employees and Frank Hurt, their international president, to decide if they want to call off the strike and save this company, or cause massive financial harm to thousands of employees and their families," Rayburn said Wednesday in announcing the deadline.

"Hostess Brands is making a mockery of the labor relations system that has been in place for nearly 100 years," BCTGM President Frank Hurt said in a statement earlier this week.  "Our members are not just striking for themselves, but for all unionized workers across North America who are covered by collective bargaining agreements."

Friday's announced decision means the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States, the company said.

Copyright 2012 ABC News Radio

Thursday
Nov152012

Twinkies Maker Hostess to Liquidate Company if Strikes Persist

Justin Sullivan/Getty Images(IRVING, Texas) -- The end for Twinkies may just be hours away.  Hostess Brands Inc., the maker of the iconic snack, announced on Wednesday that it will liquidate the entire company if not enough striking employees return to work by Thursday evening.

“We simply do not have the financial resources to survive an ongoing national strike,” Hostess CEO Gregory Rayburn said in a statement Wednesday.  “Therefore, if sufficient employees do not return to work by 5 p.m., EST, on Thursday to restore normal operations, we will be forced to immediately move to liquidate the entire company, which will result in the loss of nearly 18,000 jobs."

The strikes began on Nov. 9, when the company imposed a contract that would cut workers' wages by 8 percent.  The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) said the contract would also cut benefits by 27 to 32 percent.

Hostess, which is privately owned by two hedge funds, has struggled in recent years with two bankruptcy filings.  The company said it "has done everything in its power to pursue a reorganization of its business as a going concern, including spending the better part of 18 months negotiating with its key constituents to obtain a consensual agreement."

"It is now up to Hostess’ BCTGM represented employees and Frank Hurt, their international president, to decide if they want to call off the strike and save this company, or cause massive financial harm to thousands of employees and their families,” Rayburn said.

If the strike continues, Hostess said it will file a motion on Friday to wind-down the company and sell all of its assets.  If the U.S. Bankruptcy Court grants the motion, the company will then begin to close all of its operations as early as Nov. 20.

Copyright 2012 ABC News Radio

Thursday
Jul212011

Borders Liquidation to Begin Friday

Borders dot com(NEW YORK) -- Borders Group President Mike Edwards is calling it the "end of an era." After four decades in the book-selling business, Borders Group is selling off its assets.  

On Thursday, a New York judge approved the liquidation of the book and music retailer.  

"Hopefully the Books-A-Million transaction will at least help in maintaining some employees with continuing jobs," U.S. Bankruptcy Court Judge Martin Glenn said Thursday, according to The Wall Street Journal.

Books-A-Million is expected, according to a proposed deal, to buy 30 to 35 stores from the liquidation and take over the leases on those stores and hopefully preserve at least 1,000 jobs, WSJ reports.

The book retail chain was once the second-largest in the U.S., with 1,200 stores and over 10,000 employees at its peak.

Liquidation of 399 of its stores begins Friday.

Copyright 2011 ABC News Radio







ABC News Radio