Lovers of Hostess brand cakes and breads can wipe away those tears and start rejoicing once again. The mouth watering marvels by Hostess are likely to return to grocery shelves everywhere in the coming months, but not under the same owners. There may be a new owner for each division of its brands, thus a splitting up of Twinkies, Devil Dogs, and Wonder Bread into different bidders brands.
There appears to be likely suitors for each brand Hostess is liquidating – Hostess brand (Twinkies, Ho Hos), Drake’s cakes (Devil Dogs), and both its bread brands (Wonder and Home Pride). A few of the factories supporting these brands are located on the East Coast. Hostess filed for bankruptcy for the second time in the past decade this past November. The company was unable to reach a new contract agreement with its largest union and the strike that followed destroyed their ability to maintain production at an operable level.
Hostess announced its plan to liquidate in mid-November. While the union was the catalyst for the liquidation, it is suspected that tumult in the managerial ranks and a failure to update facilities were also major factors in the company’s demise.
Hostess is currently taking bids for the company and its various brands. They plan on filing binding “stalking horse” bids come January. A “stalking horse” bid is an initial bid on a bankrupt company’s assets from an interested buyer within a bidding pool chosen by the company that sets the bar for later bids. It is a way to prevent company’s getting ‘low-balled’ on the bidding process by making other bidders start at a certain competitive bid’s level from the beginning. Hostess currently will not indicate where that bar will fall or what they estimate the brands will be purchased for.
If you are facing the difficult decisions faced with bankruptcy, either for yourself or your company, attorneys practiced in the area of bankruptcy law can assist you in maximizing your results and your options.
Source: The Daily Record, “Hostess expects to split up snack cakes in sale,” Dec. 21, 2012