Hostess pension fund, union challenge wind-down, bonus plan
By Bloomberg | December 14, 2012 4:59 pm
A Hostess Brands union and a pension fund are appealing the court order that gave the bankrupt Twinkie maker permission to wind down.
U.S. Bankruptcy Judge Robert Drain, at a Nov. 29 hearing in White Plains, N.Y., approved Hostess' requests to shut down and to pay as much as $1.83 million in incentives to 19 senior managers, while overruling objections to the bonuses.
The creditors are appealing the wind-down order entered in the case on Nov. 30, according to court papers filed Friday by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and the $4.85 billion Bakery and Confectionery Union and Industry International Pension Fund, Kensington, Md.
Hostess won final approval from Mr. Drain to sell its assets and eliminate about 18,000 jobs. The liquidation has drawn about two dozen bidders, including Wal-Mart Stores Inc. and Kroger Co., according to a person familiar with the matter.
Tom Becker, a Hostess spokesman, didn't immediately respond to a request seeking comment on the appeal notice.
Hostess said it was pushed into liquidation when the bakers' union went on strike Nov. 9 after Mr. Drain imposed contract concessions opposed by 92% of the union's members.
The company sought court protection in January, its second time in bankruptcy, listing assets of $982 million and debt of $1.43 billion.