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Twinkies saved...execs get huge bonuses, retiree benefits to stop

NEW YORK (AP) — The future of Twinkies is virtually assured.

Hostess Brands Inc. got final approval for its wind-down plans in bankruptcy court Thursday, setting the stage for its iconic snack cakes to find a second life with new owners — even as 18,000 jobs will be wiped out.

The company said in court that it's in talks with 110 potential buyers for its brands, which include CupCakes, Ding Dongs and Ho Hos. The suitors include at least five national retailers such as supermarkets, a financial adviser for Hostess said. The process has been "so fast and furious" Hostess wasn't able to make its planned calls to potential buyers, said Joshua Scherer of Perella Weinberg Partners.

"Not only are these buyers serious, but they are expecting to spend substantial sums," he said, noting that six of them had hired investment banks to help in the process.

The update on the sale process came as Hostess also received approval to give its top executives bonuses totaling up to $1.8 million for meeting certain budget goals to bring down costs during the liquidation. The company says the incentive pay is needed to retain the 19 corporate officers and "high-level managers" during the wind down process, which could take about a year.

Two of those executives would be eligible for additional rewards depending on how efficiently they carry out the liquidation. The compensation would be on top of their regular pay.

The bonuses do not include pay for CEO Gregory Rayburn, who was brought on as a restructuring expert earlier this year. Rayburn is being paid $125,000 a month.

Hostess was given interim approval for its wind-down last week, which gave the company the legal protection to immediately fire 15,000 union workers. The company said the terminations were necessary to free up workers to apply for unemployment benefits. About 3,200 employees are being retained to help in winding down operations, including 237 employees at the corporate level.

The bakers union, Hostess' second-largest union, has asked the judge to appoint an independent trustee to oversee the liquidation, saying that the current management "has been woefully unsuccessful in its reorganization attempts."

Hostess had already said last week that it was getting a flood of interest from potential buyers for its brands, which also include Devil Dogs and Wonder bread. The company has stressed it needs to move quickly to capitalize on the outpouring of nostalgia sparked by its liquidation.

"The longer these brands are off the shelves, the less they're going to be valued," Scherer said Thursday in U.S. Bankruptcy Court in the Southern District of New York in White Plains, N.Y.

Last week, Scherer had noted that it was a "once-in-a-lifetime opportunity" for buyers to snap up such well-known products without the debt and labor contracts that would come with the purchasing the entire company. Although Hostess sales have been declining over the years, they still clock in at between $2.3 billion and $2.4 billion a year.

Scherer also said a surprising number of potential buyers have expressed interest in most of its three dozen factories.

The company's demise came after years of management turmoil and turnover, with workers saying the company failed to invest in updating its products. In January, Hostess filed for its second Chapter 11 bankruptcy in less than a decade, citing steep costs associated with its unionized workforce.

Although Hostess was able to reach a new contract agreement with its largest union, the Teamsters, the bakers union rejected the terms and went on strike Nov. 9. Hostess announced its plans to liquidate a week later, saying the strike crippled its ability to maintain normal production.

In court Thursday, an attorney for Hostess noted that the company is no longer able to pay retiree benefits, which come to about $1.1 million a month. Hostess stopped contributing to its union pension plans more than a year ago.

Toward the end of the hearing, a man who said he'd worked for Hostess for 34 years stood to give his objections to the wind-down plan, saying creditors shouldn't be paid when the company hasn't been making its contributions to workers' pension funds.

"I have traveled pretty far to get here," he said, noting that many of his co-workers didn't know how to get to the hearing and speak for themselves. "I just wanted to be heard."

by Anonymousreply 2512/01/2012

My an India company will purchase it!

Curry Twinkies!

by Anonymousreply 111/29/2012

Excellent! This is classic Bain. Purchase the cupcakes and immediately suck out the creamy center.

by Anonymousreply 211/29/2012

In Europe, protestors would close these plants down.

by Anonymousreply 311/29/2012

This is why we need corporate reform, and particularly an end to the scams of Bankruptcy Court.

by Anonymousreply 411/29/2012

Hostess does not make Devil Dogs, Drakes does. I know my snack cakes.

by Anonymousreply 511/29/2012

The Drakes brand is also owned by Hostess Brands.

by Anonymousreply 611/29/2012

Ooohh I your face!

by Anonymousreply 711/30/2012

Shameful.

by Anonymousreply 811/30/2012

I read this as "Twinks saved" at first and sighed, "thank God." Then I read the real title of this thread and sighed, "thank God."

by Anonymousreply 911/30/2012

I hope they bring back Dolly Madison Pink Umbrellas.

by Anonymousreply 1011/30/2012

LOL at R9!

by Anonymousreply 1111/30/2012

I thought that Mexican company, Bimbo, is buying Hostess? Bimbo's pisses me off because they are literary trying to buy every company through out the world that makes wholesale bakery goods. Bimbo owns a huge chunk of Sarah Lee to they call the shots, Entenmann's, and an endless list of other companies. They want to get to the point that they are thee sole wholesaler to the point that there is no competition. They are eventually going to dominate the wholesale bakery market to the point that wholesale bakery's that will are trying to succeed will be squashed! My brother owns a small bakery business who would like to eventually do wholesale.The famliy that owns Bimbos are worth multibillion dollars already so I guess their wealth is not enough. I hope Hostess doesn't sell to these vaulters.

by Anonymousreply 1211/30/2012

So where is the corporate-apologist poster (a.k.a. scab) on the other Hostess thread who insisted that there would be no benefits or advantages for Hostess management and that the unions were deluded and greedy?

Gone, after spreading his/her masters' visions of capitalist Randian selfishness?

by Anonymousreply 1411/30/2012

R16, was the guy who knew all that about R15 on the radio and had inside business information?

It's amazing what gullible people will fall for.

by Anonymousreply 1711/30/2012

R16 wounded R15. So sad. Then again, R15 likes union busters.

by Anonymousreply 1911/30/2012

conservatives are such a lovely, non-violent people.

by Anonymousreply 2011/30/2012

the tiny, repulsive penis thing must have hit close to home for r15/r18. still, with that level of mental retardation, i'm shocked he was able to comprehend the insult.

by Anonymousreply 2111/30/2012

[quote]So what, geesh you 'mos are all retarded.

When is the 'mos troll going to be banned for good?

by Anonymousreply 2312/01/2012

All this talk about snack cakes has me moist. You know, down there.

by Anonymousreply 2412/01/2012

This has scam wriitten all over it and the court, as usual, awarded the corporate criminals with the money. America sliding down the boob tube.

by Anonymousreply 2512/01/2012
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