Hostess Begins Liquidation As Private Equity Firms Hover

Nov 26 2012 | 11:48am ET

Hostess Brands' private equity and hedge fund owners put the company into liquidation on Wednesday as other private equity firms prepared to make their offers for its holdings.

A federal bankruptcy judge in White Plains, N.Y., approved Hostess' bid to go out of business the day before Thanksgiving, after a last-ditch mediation effort failed to win a deal between the company, owned by p.e. firm Ripplewood Holdings, and one of the company's unions. The company began to lay off most of its 18,500 employees in the wake of the decision.

Hostess, which makes Twinkies, Ho Hos and Wonder Bread, isn't likely to be out of business for long. Hostess lawyer Heather Lennox said that it has received "a flood of inquiries" since filing for bankruptcy earlier this month, a week after the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union launched a strike against the company. "We therefore think there could be very healthy competition," she told the court.

Among the competitors will likely be private equity firms. Metropolous & Co. and Sun Capital Partners have both been mentioned as possible bidders.

Hostess, which boasts hedge funds Monarch Alternative Capital and Silver Lake Partners as creditors, said it would return to court within a few weeks to begin auctioning its assets.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...