How Hostess failed hedge fund vs unions?

The hedge funds concluded that Hostess isn’t worth saving. The unions either bet the hedge funds would blink before putting the company into liquidation or decided that it was better to sacrifice the jobs of Hostess workers than give in to demands for further pension concessions.

Is Hostess a union?

A strike ended operations as Hostess; new buyer won’t have unions. Hostess Brands LLC plans to reopen bakeries and hire nonunion workers. April 26, 2013— — The bankrupt assets of Hostess Brands, Inc., the company responsible for Twinkies, Ho Ho’s, Sno Balls and Ding Dongs, are being put back to work by a buyout firm.

Why did Hostess almost go out of business?

Plus, people love their Twinkies. The problem Hostess has encountered over the past decade is less related to a sea change in American diet and more due to its own mismanagement and overextension. The company filed for bankruptcy protection in 2004 under its previous name, Interstate Bakeries.

What happened Hostess?

Narrator: By January 2012, with nearly a billion dollars in debt, Hostess Brands filed for Chapter 11 bankruptcy again. Broadcaster: The company that makes Twinkies, Wonder Bread, and Ding Dongs announced this morning that it is going out of business.

Is Hostess out of business?

Dean Metropoulos & Co. partnered with Apollo Global Management to save Hostess from bankruptcy. The company was liquidated the second time, with various assets and brands going at auction to the new Hostess, under Metropoulos, as well as to Flowers Foods, United States Bakery, McKee Foods and Grupo Bimbo.

Who saved Hostess?

With ingenuity, capital and creative chemistry, billionaire C. Dean Metropoulos and Apollo Global’s Andy Jhawar rescued Hostess Brands –and set themselves up to feast on a $2 billion gain. Walk in the door of Hostess Brands’ flagship bakery in Emporia, Kansas and your first thought is: What a dump.

Who bailed out Hostess?

With ingenuity, capital and creative chemistry, billionaire C. Dean Metropoulos and Apollo Global’s Andy Jhawar rescued Hostess Brands –and set themselves up to feast on a $2 billion gain.

Is Hostess Bakery still in business?

Dean Metropoulos and Company. Currently, the main operating subsidiaries are Hostess Brands, LLC and Voortman Cookies Limited….Hostess Brands.

What is the parent company of Hostess?

It owns several bakeries in the United States that produce snack cakes under the Hostess and Dolly Madison brand names and its Canadian subsidiary, Voortman Cookies Limited, produces wafers and cookies under the Voortman brand name….Hostess Brands.

How long did Hostess go out of business?

How much is a snack-cake maker worth? If it’s Hostess Brands, which nearly went out of business just four years ago, that would be about $2.3 billion, according to the terms of a takeover deal announced on Tuesday.

Why did hostess have to go out of business?

Rather, “the real story is the story of two unions, the Teamsters and the Bakery union of the AFL-CIO.” As Jenkins has it, though the Teamsters agreed to givebacks to finance the latest Hostess turnaround attempt, the Teamsters held onto work rules that would have driven the company into the ground.

Why did hostess stop making union pension contributions?

In August, as Fortune’s Kaplan reports, Hostess stopped making union pension contributions. With its investment under water, Ripplewood ceased negotiating with the unions, which left workers to deal with the hedge funds. After the bakery workers went on strike, the hedge funds concluded that Hostess wasn’t worth saving, writes Carney.

Who is to blame for the demise of hostess?

At the Journal, Holman Jenkins says that private equity is not to blame for Hostess’s demise. Rather, “the real story is the story of two unions, the Teamsters and the Bakery union of the AFL-CIO.”

Who are the parties responsible for Hostess shutting down?

In Carney’s summary, the parties most responsible for Hostess’s decision to shut down are two hedge funds, Silver Point and Monarch, which control hundreds of millions in Hostess debt and, as Carney has it, “finally decided they won’t squeeze any more filling into the Twinkie.”