Hostess update: Union asks court for trustee to oversee liquidation

By Nathan Gray

- Last updated on GMT

Related tags Bankruptcy

Hostess update: Union ask court for Chapter 11 trustee
The bakers' union of Hostess Brands has asked the court overseeing the firm’s bankruptcy to appoint a Chapter 11 trustee to safeguard an orderly wind-down.

The maker of Twinkies and Ding Dongs won permission to begin closing down operations in the U.S. Bankruptcy Court last week – although the company has expressed hope that many of its widely known brands, including Twinkies and Wonder Bread, would survive in the hands of new owners.

The Texas-based firm won the interim approval to shut down and start selling assets after last-minute mediation with the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) failed to resolve a contract dispute – leaving more than 18,000 jobs at risk.

However, in a new filing to the U.S. Bankruptcy Court, lawyers for two unions – including the BCTGM – and a related pension fund (said they objected to allowing ‘incumbent management’ to supervise the company's liquidation.

“A Chapter 11 trustee must be appointed to oversee the debtors’ orderly liquidation and protect the best interest of creditors,”​ reads the filing made to the court in New York by the BCTGM, the Bakery and Confectionery Union and Industry International Pension Fund.

The papers went on to add that the union and pension fund support an ‘orderly’ wind-down, but “object to that process being carried out by incumbent management.”

Lawyers for the unions and the pension fund have asked to have the request for a trustee heard on when Hostess Brands seek final approval for its wind-down motion tomorrow (November 29th​).

However, Hostess said it objects to the request to have the matter heard at short notice, with lawyers for the troubled firm filing adding that they believed there were "serious legal deficiencies" in a motion for a trustee.

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