Mediation Fails As Hostess Slides Towards Liquidation

Nov 21 2012 | 11:01am ET

Hostess Brands' hedge fund and private equity owners will seek permission to shut the company down after failing to strike a deal with a striking union yesterday.

Hostess, which filed for bankruptcy on Friday, first asked for approval to lay off its more than 18,000 employees and liquidate on Monday, but U.S. Bankruptcy Judge Robert Drain pushed for a last-ditch mediation session yesterday, with himself as mediator. But Hostess, which is owned by private equity firm Ripplewood Holdings and features hedge funds Monarch Alternative Capital and Silver Lake Partners as lead creditors, said the session was "unsuccessful."

Hostess, which makes the iconic Twinkie and dozens of other products, including Wonder Bread, blamed the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union for the decision to liquidate, arguing that it was crippled by the strike, called earlier this month. The union imposed the work-stoppage after it refused to accept Hostess' "last-and-best" contract offer.

With Drain's approval, Hostess can begin to sell itself, either whole or in pieces. The company may well wind up with another private equity owner; several firms, including Metropoulos & Co. and Sun Capital Partners, are reportedly interested.


In Depth

Kettera Q&A: The Advantages of Alternative Investment Platforms

Oct 28 2016 | 5:52pm ET

The past several years have seen a distinct push towards easier and cheaper access...

Lifestyle

Trump Attends 'Villains and Heroes' Costume Party Dressed As...Himself

Dec 5 2016 | 11:16pm ET

U.S. President-elect Donald Trump attended a "Villains and Heroes" costume party...

Guest Contributor

Nowhere to Hide: Why the Future of Asset Management Depends on Innovation

Nov 15 2016 | 6:55pm ET

Information technology has reshaped the asset management industry’s periphery,...

 

From the current issue of

Chicago-based independent futures brokerage and clearing firm R.J. O’Brien & Associates (RJO) has hired industry veteran Daniel Staniford as Executive Director, responsible for the firm’s institutional business development in New York and London.

AVAILABLE NOW at BARNES & NOBLE

NEWSTAND LOCATOR