Bankrupt Hostess Brands, badly hurt by a slowdown brought on by a strike by its Bakers Union, said this morning that it is asking a judge for permission to shut down its operations.
The move, if it approved, will likely result in the loss of 18,300 jobs at its 36 bakeries and more than 550 distribution centers around the country.
Hostess is expected to auction off its valuable brands – including Twinkies, Wonder Bread, Ho-Ho’s and Ding Dongs – as part of its liquidation process.
The court will likely schedule a hearing Monday to see if there are objections to the liquidation, and, if there are none, will authorize the liquidation of the 82 year-old business. Likely, liquidation would happen near the end of the month.
CHRISTIE REFUSES TO ANSWER QUESTION ON HOSTESS SHUTDOWN
A source close to the situation said he believes there is an 80 percent chance that Hostess will liquidate even though legally there are no impediments from changing its mind before the final court order.
In reality, companies who file for liquidation rarely, if ever, reverse course, the source said.
The company’s bakers have been striking all week against the bankrupt company protesting steep pay and benefit cuts, and the strike held long enough in enough of its 36 plants to cripple America’s biggest bakery.
The walkout at the Philadelphia plant that supplies New York with its bread largely held.
Bakery operations have been suspended at all plants. Delivery of products will continue and Hostess Brands’ retail stores will remain open for several days in order to sell already-baked products.
As a result, bread prices on the East Coast will rise as the number of operating bakeries decreases, a Hostess competitor said.