Politics: Hostess mediation fails, judge orders liquidation

By ROBERT LAURIE – Twinkies will, however, live on.

Anyone holding out hope that Hostess would enjoy some kind of reprieve due to last minute, court-ordered, mediation is about to be disappointed. 

Citing “serious questions as to the logic behind the decision” to go on strike, U.S. Bankruptcy Judge Robert Drain forced the parties into the last ditch negotiations. “I’m giving the union as well as the debtors and their lenders a last chance to try and work those issues out in private,” he said.

Yesterday, the mediation failed and, as a result, Judge Drain has said that Hostess must return to a “liquidation course.”

Today, at the close of business, 15,000 workers will be fired, allowing them to immediately file for unemployment benefits.  Hostess has requested that Drain shield them from any lawsuits that may arise from the firings. Then, with Drain’s approval, the company will begin the process of winding down completely.  According to court documents, Hostess will close 36 bakeries, 242 depots, 216 retail stores, and 311 hybrid depot-store facilities.  This should take three months, and will cost another 3,000 jobs.

Apparently there are several buyers vying for Hostess’s brands and assets.  This means that Hostess addicts will likely be able to get their cherry pie fix in the future. Surely, it's welcome news to people who were obsessed enough to purchase cases of the treats for upwards of $150 on eBay.  

One potential buyer visited a former Drake’s factory yesterday, and asked if it would be possible to “rehire employees who worked here.”

Keep in mind that there were many non-union workers involved with the Hostess operation, as well as teamsters who worked to avoid the strike, and there’s a great deal of speculation that theirs might be the jobs that would be retained.  It’s widely held that the bakery union workers who chose to demolish the company are considered toxic, and would be unlikely re-hires.

We can’t imagine why.