Texas-based Hostess Brands, the maker of the famous sweet treats Twinkies and Ding Dongs, yesterday filed for bankruptcy, owing almost $1bn to the Bakery & Confectionary Union & Industry International Pension Fund.
According to a report by the Daily Mail, just three years after the company last emerged from insolvency, economic turmoil and a growth in health-conscious consumers have spelled disaster for the confectionery company.
Twinkies, the cream-filled sponge cakes, have been a guilty pleasure in the US for decades. Jimmy Dewar, the creator of the tasty treat, once remarked: “Twinkies was the best darn-tootin’ idea I ever had.”
Hostess, which is based in Irving, Texas, had total assets of $981million and liabilities of $1.43billion as of December 10, 2011 including a $944m pension debt. Hostess, founded in 1930, operates around 36 bakeries and employs about 19,000 people, a majority of whom are union members.
Hostess said its return to bankruptcy would not disrupt the company’s sale of baked goods. And executives are optimistic that, as it did last time around, Hostess will climb out of bankruptcy. ’We remain hopeful that we can reach an agreement that will allow us to amend our labour contracts so that we can emerge from Chapter 11 as a highly competitive company that provides secure jobs for our employees,’ chief executive Brian Driscoll said in a statement.