Privately held Irving, Texas-based Hostess Brands, the maker of Twinkies snack cakes, Wonder bread, Ding Dongs, Drake’s Devil Dogs, and Nature’s Pride breads, fell back into bankruptcy about three years after completing an earlier restructuring in February 2009. It filed a Chapter 11 petition in U.S. Bankruptcy Court in Manhattan, listing assets of as much as $1 billion and debt of more than $1 billion, reports Bloomberg. Slowing sales, higher labor costs and rising prices for sugar, flour and other ingredients are cited. Annual sales are about $2 billion.
In September 2004, burdened with declining sales combined with high labor and ingredient costs, Interstate filed for bankruptcy in Kansas City, Missouri, it closed facilities, cut delivery routes and eliminated jobs. It was acquired by buyout firm Ripplewood Holdings LLC and lenders including Silver Point Capital LP took control of Interstate Bakeries Corp., which was renamed Hostess Brands, which employs about 20,000 people at bakeries, distribution centers and outlet stores across the country.
The company will receive a commitment for $75 million in debtor-in-possession financing from a group of existing first-lien lenders led by Silver Point Capital L.P. The financing is expected to help Hostess continue normal business while undergoing restructuring. The company said it will continue operating its bakeries, outlet stores and distribution centers and delivering its products to customers.
“Hostess has some of our industry’s most powerful and resilient brands,” said Brian Driscoll, president and CEO. “With generations of loyal consumers, numerous iconic products and a talented and experienced workforce, Hostess Brands has tremendous inherent strengths to build upon.”
Amen to that.
