It’s really happening, everyone. On Wednesday, after a four-hour hearing, U.S. Bankruptcy Judge Robert Drain officially granted Hostess Brands Inc. permission to shut down. The process, which will be headed up by restructuring specialist Gregory Rayburn, is expected to take one year.
"It appears clear to me that the debtors have taken the right course in seeking to implement the wind-down plan as promptly as possible," Drain said at the end of the hearing.
While liquidation might be the right move for the company, it means bad news for many workers. According to Rayburn, 15,000 workers will immediately lose their jobs, and the 3,200 employees left will only stick around for about four months.
"We are trying to be as sensitive as we can possibly be under the circumstances to the human cost,” Heather Lennox, one of Hostess’s lawyers, told the court.
However, the end of Hostess does not necessarily mean the end of its brands, which include the classic treats Twinkies, Ho-Ho’s and Wonder Bread. Thomson Reuters reports that many of Hostess’s rivals as well as regional bakeries and private equity firms have expressed an interest in potentially buying the brands. The company expects to receive initial bids in the next few weeks.
Follow the tragic tale of Hostess on InsideCounsel:
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