US baker Hostess Brands has indicated it will liquidate the company tomorrow (15 November) if striking employees fail to return to work this evening.
The group, which manufactures brands including Nature's Pride and Wonder Bread, said it lacks the "financial resource" to survive an ongoing national strike.
If "enough striking employees" fail to return to work by 5pm ET today the group will seek bankruptcy court approval to liquidate the entire business. The closure would result in the loss of nearly 18,000 jobs.
The Bakery, Confectionary, Tobacco Workers and Grain Millers Union - which represents 5,680 Hostess workers - launched a strike last Friday. The union is protesting against an 8% cut to pay, which is effective immediately, and further deep cuts to benefits the union said would reduce members earnings by around 30%.
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Hostess to Liquidate if Strikes Impede Normal Operations Past 5 p.m., EST, Thursday
IRVING, Texas, Nov. 14, 2012 /PRNewswire/ -- Hostess Brands Inc. announced today that it will file a motion with the U.S. Bankruptcy Court on Friday to liquidate the entire Company if enough striking employees do not return to work by 5 p.m., EST, Thursday to enable the Company to resume normal operations. The strikes were called on November 9 by the Bakery, Confectionery, Tobacco Workers and Grain Millers Union (BCTGM).
"We simply do not have the financial resources to survive an ongoing national strike," said Gregory F. Rayburn, the Company's Chairman and CEO. "Therefore, if sufficient employees do not return to work by 5 p.m., EST, on Thursday to restore normal operations, we will be forced to immediately move to liquidate the entire Company, which will result in the loss of nearly 18,000 jobs. It is now up to Hostess' BCTGM represented employees and Frank Hurt, their international president, to decide if they want to call off the strike and save this Company, or cause massive financial harm to thousands of employees and their families."
Hostess has done everything in its power to pursue a reorganization of its business as a going concern, including spending the better part of 18 months negotiating with its key constituents to obtain a consensual agreement. As previously disclosed, the Company has obtained the support of its largest union, the International Brotherhood of Teamsters, and its lenders. With the support of the BCTGM, Hostess believes it would successfully reorganize.
If sufficient employees do not return to work by the deadline to restore normal operations, the liquidation process will unfold as follows:
Hostess will file a motion with the U.S. Bankruptcy Court on Friday, November 16, 2012 requesting to wind-down the Company and sell all of its assets; Hostess has requested a hearing on the motion for Monday, November 19, 2012; If the motion is granted at this hearing, Hostess Brands will begin to close all of its operations as early as Tuesday, November 20, 2012. The closures will include the termination of all employees except small, temporary crews to clean, secure and prepare facilities and other assets for sale. Additional information about the Company's labor issues can be found at www.hostessstrike.info.
About Hostess Brands
Founded in 1930 and based in Irving, Texas, the Company's products include iconic brands such as Hostess®, Wonder®, Nature's Pride®, Dolly Madison®, Drake's®, Butternut®, Home Pride® and Merita®. Hostess Brands has approximately 17,780 employees and operates 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States.