Hostess Brands confirmed that it has filed for Chapter 11 bankruptcy protection, citing union contracts and pensions. This is the second bankruptcy filing for the maker of HoHos, DingDongs and Twinkies.
The filing comes just three years after the Irving, Texas-based company completed a major reorganization stemming from a 2004 bankruptcy. The first restructuring, which was completed in February 2009, resulted in only "incremental change" that proved insufficient to address long-standing labor and pension issues, according to the company.
Hostess carries more than $860 million in debt and has been facing a cash squeeze amid high labor costs and rising prices for sugar, flour and other ingredients. The company’s roughly $2.5 billion in annual sales haven’t been enough to match those costs, creating huge shortfalls.
Hostess said in a press release that it's negotiating hoped-for cost savings with its labor unions.
The company has about 19,000 employees and operates 36 bakeries, 565 distribution centers and 570 bakery outlet stores in the U.S. No layoffs are currently planned, a spokeswoman told the Los Angeles Times.
