Hostess Brands Inc., the 82-year-old company that gave generations of Americans the ever-fresh Twinkie cakes will immediately fire about 15,000 workers after a last-ditch mediation with its second-largest union collapsed Wednesday. It will also actively respond to offers to buy the rights to make its sugary treats.
The financially struggling company, which employees about 18,000 workers, recently obtained wage and pension concessions from the largest of its unions, the Teamsters, but was unable to get similar concessions from the Bakery, Confectionary, Tobacco and Grain Millers Union.
U.S. bankruptcy judge Robert Drain summoned both parties to a mediation session Tuesday but the effort, which lasted 11 hours, failed and on Wednesday Hostess asked for and received permission to begin liquidation, a process that begins with the dismissal of about 15,000 workers.
Teamster officials publicly criticized the bankers union, which had been on strike since Nov. 9.
The Irving, Texas-based company will close 33 bakeries, 533 distribution centers and 527 bakery outlet stores across the United States.
Hostess makes Wonder Bread, Ho Hos and Ding Dongs, among numerous other sweet treats, but its four-inch, cream-filled Twinkie has been its signature product.
In Wednesday's hearing before Drain, Hostess argued for a swift closure of operations so employees could begin applying for unemployment and buyers could be found for its assets, including the Twinkie, according to the New York Times.
"From this point forward I need two things to happen," said CEO Gregory Rayburn. "I need to maximize the value of the estate and I need to do the best thing for the employees."
An investment banker with Perella Weinberg Partners said his firm is contacting about 145 financial firms to gauge their in buy Hostess Brands assets, the New York Times said. The banker, Joshua Scherder said he already had received six takeover bids, though they were all inadequate.
Potential buyers include private equity firms, liquidators, regional bakeries and such national retail food chains as Wal-Mart Stores Inc. and Kroger, he said.
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