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Twinkies-maker Hostess Brands to hold last-ditch talks | Twinkies-maker Hostess Brands to hold last-ditch talks |
(35 minutes later) | |
Hostess Brands, which makes Twinkies in the US, has agreed to go to mediation with lenders and unions on Tuesday. | Hostess Brands, which makes Twinkies in the US, has agreed to go to mediation with lenders and unions on Tuesday. |
The company was encouraged to hold more talks by a bankruptcy court, to which it had been expected to apply for permission to liquidate itself. | The company was encouraged to hold more talks by a bankruptcy court, to which it had been expected to apply for permission to liquidate itself. |
Hostess Brands blamed the need to liquidate on a nationwide strike by the Bakery, Confectionery, Tobacco Workers and Grain Millers Union (BCTGM). | Hostess Brands blamed the need to liquidate on a nationwide strike by the Bakery, Confectionery, Tobacco Workers and Grain Millers Union (BCTGM). |
It had sought bankruptcy protection from its creditors in January. | It had sought bankruptcy protection from its creditors in January. |
Monday's hearing had been expected to be the first step towards selling its well-known brands such as Twinkies, Wonder Bread, Ding Dongs and Ho Hos. | Monday's hearing had been expected to be the first step towards selling its well-known brands such as Twinkies, Wonder Bread, Ding Dongs and Ho Hos. |
But the hearing was quickly adjourned until Wednesday as the judge urged the parties to hold private talks to find a solution. | But the hearing was quickly adjourned until Wednesday as the judge urged the parties to hold private talks to find a solution. |
In a short statement, the company said: "Hostess Brands Inc. announced today that it will follow a request from the US Bankruptcy Court for the Southern District of New York to enter a confidential mediation with BCTGM on Tuesday." | In a short statement, the company said: "Hostess Brands Inc. announced today that it will follow a request from the US Bankruptcy Court for the Southern District of New York to enter a confidential mediation with BCTGM on Tuesday." |
"Today's hearing to consider Hostess Brands' motion to wind down the company and sell all of its assets has been adjourned until 1100EST [1600 GMT] on Wednesday." | "Today's hearing to consider Hostess Brands' motion to wind down the company and sell all of its assets has been adjourned until 1100EST [1600 GMT] on Wednesday." |
'Serious questions' | |
Members of the BCTGM union went on strike after workers were asked to accept pay cuts, diminished health benefits and a reduction in contributions to their pension fund from $100m (£63m) a year to $25m a year. | Members of the BCTGM union went on strike after workers were asked to accept pay cuts, diminished health benefits and a reduction in contributions to their pension fund from $100m (£63m) a year to $25m a year. |
It also emerged that some members of the management had received 80% pay rises at the same time. | It also emerged that some members of the management had received 80% pay rises at the same time. |
The company reached an agreement with its biggest trade union, the International Brotherhood of Teamsters, but the bakers' union stayed out on strike. | |
"Many people, myself included, have serious questions as to the logic behind this strike," said Judge Robert Drain, of the Bankruptcy Court in the Southern District of New York. | |
"My desire to do this is prompted primarily by the potential loss of over 18,000 jobs as well as my belief that there is a possibility to resolve this matter." About 30% of Hostess staff are BCTGM members. | |
The company's chief executive Gregory Rayburn said an agreement would have to come within 24 hours because winding down operations at the company's 33 factories was costing $1m a day. |