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

Q&A: Biotech Investing with Crossover Fund RA Capital

Sep 15 2015 | 5:40pm ET

Boston-based RA Capital Management is an intriguing mix of sophisticated life sciences...


Citadel Supports Manhattan Real Estate With Record Deal

Sep 16 2015 | 3:04pm ET

Never count hedge funds out of a big property deal. The Manhattan real estate market...

Guest Contributor

Hedge Fund Marketing To Independent RIA Firms

Sep 30 2015 | 1:56pm ET

In this contributed article, Bruce Frumerman of Frumerman & Nemeth Inc. explains...


Editor's Note

Upcoming Events