Twinkie Maker Hostess Brands in Bankruptcy Filing

By: CNN posted by Stephanie Ramos Tomeoni
By: CNN posted by Stephanie Ramos Tomeoni

NEW YORK (CNNMoney) -- Enjoy your Twinkies while you can, because Hostess Brands, the storied American manufacturer of Ho Hos and Ding Dongs cake snacks, filed for Chapter 11 bankruptcy on Wednesday.

The company, based in Irving, Texas, filed for Chapter 11 protection in U.S. Bankrutpcy Court in New York.

A spokeswoman for Hostess did not immediately return messages from CNNMoney as to whether more employees will lose their jobs, or whether the company will cease making its famous products, including CupCakes and Sno Balls.

The company has about 19,000 full-time and part-time employees, including 10,413 hourly workers and 8,436 salaried workers, according to a court filing. About 83% of the employees are union members.

"The employees have been witness to the closing or sale of several operations within the debtors' business as well as company-wide layoffs or reductions in force," the document said. "The increase pressures on the employees, together with layoffs and general concern about the welfare of the debtors, have led to a decline in employee morale."

The company said that it pays about $63.2 million to its employees per pay period, and that it currently owes them $21 million for services rendered.

In its bankruptcy filing, the privately held company said that it owes more than $1 billion to creditors. The debt is spread out among a vast number of creditors - between 50,000 and 100,000, the company said.

Pension funds feature prominently in the list of creditors.

The Bakery & Confectionary Union & Industry International Pension Fund has the largest claim, of $994 million.

The next largest claim, of about $12 million, is from Central States, Southeast and Southwest Areas Pension Plan.

Companies with claims include Cereal Food Processors, with a claim of $8.5 million, and Cargill, with about $2 million. Also among the creditors: temporary employment agency Manpower, which is owed $754,000, and Goodyear Tire & Rubber, owed $552,000.

Published reports indicated that Hostess sought potential buyers, including Oreo-cookie maker Kraft Foods and Campbell Soup's Pepperidge Farm.

Hostess has been competing with snack cake makers include Flowers Foods, which makes Tastykake.


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