Privately-held Hostess Brands, maker of iconic Twinkie snack cakes, filed for bankruptcy Friday, weighed down by $1 billion debt and $2 billion of unfunded pension liabilities.
The company's workers were recently involved in a dispute over pay and benefits. Hostess given a Thursday afternoon deadline for employees to return to work or face a shutdown of the company.
"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," said Hostess Brands CEO Gregory F. Rayburn.?
"Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders."
The company said it will seek bankruptcy court permission to close its business and sell its assets "including its iconic brands and facilities. Bakery operations have been suspended at all plants."
Based in Irving, Texas, the company has already reached a contract agreement with its largest union, the International Brotherhood of Teamsters. Thousands of members of its second-biggest union went on strike late last week after rejecting a contract offer that cut wages and benefits in September.?
Production at about a dozen of Hostess' 33 plants has been seriously affected by the strike.
Competition is increasing in the snack space and North Americans are increasingly conscious about healthy eating. Hostess also makes Dolly Madison, Drake?s and Nature?s Pride snacks.
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