Only two years after emerging from bankruptcy, Hostess Brands Inc. has once again filed for Chapter 11 bankruptcy protection. In a statement released earlier today, the company, which makes products such as Twinkies and Wonder Bread, cites the weak economy and pension- and medical-benefits cost obligations as factors.
Interstate Bakeries, Hostess Brands’ former name, filed for Chapter 11 in 2004 and emerged in 2009. The company said changes it made during that emergence proved insufficient. In its most recent filing, Hostess said its owes its biggest unsecured creditor, Bakery & Confectionary Union & Industry International Pension Fund, $944.2 million. It owes its second biggest unsecured creditor, Central States, Southeast and Southwest Areas Pension Plan, far less, about $11.8 million. The company also listed its estimated assets between $500 million and $1 billion and its estimated liabilities at more than $1 billion.
Hostess CEO Brian Driscoll said in a statement the company is working with its unions to modify its collective bargaining agreements. The company will maintain routine operations via a $75 million financing commitment from investment firm Silver Point Capital.
The company says it does not expect this latest filing to cause disruptions the delivery of its products to stores. It also plans to restructure into a “strong, competitive” company.
"This company has tremendous potential if we can remove the barriers to success," Driscoll said in a statement.
