DETROIT - Twinkie lovers, relax.
The tasty cream-filled golden spongecakes are likely to survive, even though their maker will be sold in bankruptcy court.
Hostess Brands Inc., baker of Wonder Bread as well as Twinkies, Ding Dongs and Ho Ho's, will be in a New York bankruptcy courtroom Monday to start the process of selling itself.
The company, weighed down by debt, management turmoil, rising labor costs and the changing tastes of America, decided on Friday that it no longer could make it through a conventional Chapter 11 bankruptcy restructuring. Instead, it's asking the court for permission to sell assets and go out of business.
But with high brand recognition and $2.5 billion in annual revenue, other companies are interested in bidding for at least pieces of Hostess, like rights to the names of popular snack cakes as well as recipes.
Strikers in Lenexa have abandoned their post, leaving behind a windblown tent, soggy posters and a handful of chairs.
Friday Hostess sent home letters with18,000 employees across the country, including those in the Kansas City metro, explaining the company won’t pay employees' severance pay.
In most states, employees will be offered unemployment benefits, but in Kansas those that went on strike could even be denied those state benefits, according to rules set out by the Kansas Department of Labor.
As for Hostess, the company will be forced to sell off its assets. A judge is now expected to appoint a company to help hostess through liquidation which could take up to a year.
Hostess’ 500 bakery outlets across the country and here in the metro will stay open for the next few weeks as the company sells its remaining products. News of Hostess' bankruptcy caused sales of Twinkies and other snacks to be sold at inflated prices online.
Copyright AP Modified, Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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