Hostess Managers 75 Percent Bonus in Works To Stay On Through Twinkie Producer's Bankruptcy
Hostess Brans, Inc. is seeking permission to pay their senior management staff a 75 percent bonus of their annual pay in an effort to keep them on while the company begins to wind-down.
The decision will cause the 82-year-old Twinkie producer to be questioned on Monday by an agent for the U.S. Justice Department to determine if their bankruptcy plan is too generous to senior managers.
A U.S. Trustee agent for the Justice Department said in court documents that Hostess' plan is improper and an independent trustee may be appointed to oversee the distribution of the company's assets, according to the Chicago Tribune.
Hostess, who announced last week that they were going out of business, started liquidating the company's assets on Monday with new ownership going to the highest bidders.
Gregory Rayburn, CEO of Hostess Brands, expressed his optimism in finding new life for the company on Sunday in an interview with ABC News: "I think we'll find buyers. A few have surfaced already since Friday expressing interest in the brand to acquire them."
According to Fox News, one of the companies seeking ownership is El Grupo Bimbo, the largest bread-baking company in the world, based in Mexico. The acquisition of Hostess Brands will add to the list of well-known U.S. companies owned in part by Bimbo, which include Thomas' English Muffins, Sara Lee and Entemann's.
Some of the other companies possibly interested in acquiring Hostess Brands are Little Debbie makers McKee Foods, ConAgra and Flowers Food.
Hostess Brands, famous for the classic snack and Wonder Bread, is shutting down operations after a union dispute and a devastating strike. The company announced Friday that they're seeking permission from a federal bankruptcy court to close the business.
Around 18,500 Hostess employees will be out of a job with the closing of 33 bakeries, 565 distribution centers and 570 outlet stores. The Bakery Union, which represented 30 percent of Hostess' employees, blamed the company's management for its downfall and not the strike.
In September, the Teamsters Union agreed to the new contract that cut wages and benefits that the Bakery Union went on strike against. The Bakery Union would not agree to the deal which meant an 8 percent salary cut in the first year of the five-year agreement. Salaries were then scheduled to bump up 3 percent in the next three years and 1 percent in the final year.
Hostess previously filed for bankruptcy twice. The first instance was in 2004 and the last in January 2012.
