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Hostess Brands Shutdown Halted as Company Asks for Bonuses

Hostess Brands doesn't want to go quickly – it's fighting to wind down operations over a year plus get permission to pay management bonuses. It's "not a simple matter of turning off the lights and shutting the doors," Hostess said in court papers. Hostess, one of the largest bakeries in the United States and owner […]

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Hostess Brands Shutdown Highlights Looming Pension Crisis

Hostess Brands, the closely held maker of Twinkies, Hostess Cupcakes, Ho-Hos, Drake's Cakes and Wonder Bread, has announced that it will shut down all operations beginning today and liquidate the company's assets as soon as it receives permission from the bankruptcy court.

Hostess, which is in bankruptcy for the second time since 2004 and is now owned by a group of financial firms led by two hedge funds, had issued an ultimatum to striking bakers: Call off the strike by 5:00 p.m. Thursday or the company will be shut down. The strike persisted and the closure was announced Friday morning.

The Hostess Brands shutdown will mean the loss of 18,500 jobs nationwide. Hostess Brands operated 33 bakeries, 565 distribution centers and 570 outlet stores.

"There's no way to soften the fact that this will hurt every Hostess Brands employee," CEO Gregory Rayburn said in a letter to employees. "All Hostess Brands employees will eventually lose their jobs - some sooner than others."

But the problems at Hostess go way beyond the company and its employees.

In fact, they're part of a national issue that undermines the entire U.S. economy.

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