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

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Lifestyle

Einhorns Busts At WSOP, Finishes In 173rd

Jul 15 2014 | 10:48am ET

Greenlight Capital founder David Einhorn’s World Series of Poker won’t end at...

Guest Contributor

The Truth About Track Record Portability

Jul 24 2014 | 5:55am ET

The number of private funds converting to mutual funds has increased significantly...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note