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Hostess May Be Dismantled, But Will Twinkies Make a Come Back?
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Hostess May Be Dismantled, But Will Twinkies Make a Come Back?

Hostess Brands, Inc. sought chapter 11 bankruptcy protection earlier this year.  When efforts to restructure failed, the company asked the court for permission to liquidate its assets.  The bankruptcy court granted permission last month, and the company began the process of winding down the 82-year-old business.

The question on many Baby Boomers’ minds is whether Twinkies and Wonder Bread are gone forever.  The good news is that Hostess has already received bids for its assets from about two dozen potential buyers, including Wal-Mart, Kroger, Flour Foods, the Georgia-based company that makes Tastykake brand snacks, and Mexican Baking conglomerate, Grupo Bimbo.

The most valuable assets Hostess has are its brands, including Twinkies, Wonder Bread, Ding Dongs, Ho Hos, and Donettes.  Some of the bidders are interested in all of the assets, but others are focused on the cake or bread divisions. Proceeds from selling the assets will help pay the company’s $900 million in secured debt and about $150 million in administrative claims.

Every sale must be approved by the bankruptcy court in the normal course of bankruptcy proceedings.  The more popular a particular Hostess brand, the more valuable it is and the more likely it is that another company will buy it with hopes to profit from our sentimentality.

So the answer is Twinkies and Wonder Bread are probably not gone forever.  We will keep an eye on this case to see which brands are purchased by whom and when we might expect to see them on the grocer’s shelf again.

Glass & Goldberg provides high quality and cost-effective legal services and advice for clients in all aspects of business litigation and transactional law. Call us at (818) 888-2220, email us at info@glassgoldberg.com, or visit us on the web at www.glassgoldberg.com to learn more about the firm and sign up for future newsletters.

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