Time finally ran out for Hostess Brands on Wednesday, as a bankruptcy judge gave preliminary approval for the company to shut down after 82 years in business.
A last-ditch attempt to mediate a pay-and-benefits dispute between the company and its Bakery Workers union failed.
The decision by Judge Robert Drain sets the stage for the company to start selling its assets — including its bakeries, brands and recipes.
“Sadly, the parties were not able to come to an agreement,” said Drain. “It’s a free country. People are free not to agree.”
Hostess, maker of such beloved products as Twinkies, Wonder Bread and Drake’s snacks, announced Tuesday night the mediation efforts had failed to produce a deal.
About 15,000 of the company’s current 18,500 employees will likely be terminated in the coming days. The company said in court it needs about 3,200 employees to stay on for various periods of time to wind down the company.
The company’s operations have been closed since last Friday. Hostess’ CEO and attorneys previously said that reaching a deal to restart the company’s network of 33 bakeries and 565 distribution centers would be difficult due to the financial damage done by the strike that started Nov. 9.
But Hostess’ investment bankers testified that there have been dozens of inquiries about a possible purchase of various brands and even some facilities. Joshua Scherer, of Perella Weinberg, told the court that some of the interested parties had inquired about hiring back some workers.
“It’s a once in a lifetime opportunity for [Hostess’] competitors,” he testified.