Relax, Twinkies Aren’t Going Away Just Yet

Not long ago, as I was watching Christian High Patriots football team deliver a 56-3 pounding to their outmatched opponent, I noticed that a lot of people were posting about the bankruptcy of Hostess Brands.  Twinkie memorials and witty posts were popping up all over Facebook.  While Twinkies may be hard to find right now, a number of news stories are supporting my prediction that Bimbo Bakeries may buy some or all of the Hostess assets out of bankruptcy.  Bimbo Bakeries originally tried to purchase Hostess back in 2007 during its first bankruptcy filing.

Hostess filed for Chapter 11 for the second time in 2009.  Chapter 11 is designed for the reorganization of a business and often includes restructuring contracts and paying a small portion of debts over a number of years.  Missteps by management, rising production costs and a nasty labor disputing lead Hostess to request a liquidation of its assets.  A Chapter 11 liquidation will give Hostess more control over the liquidation process and raises the chances that the company assets can be sold off together instead of piece by piece. liquidation.

The assets of Hostess are simply too valuable to be allowed to whither away.  There is value in the recipes, the equipment, the bakeries and the actual brands will most likely be sold off to the highest bidder or bidders.  It may take a while to sort out the details of a sale and you might not see all of the Hostess products return to the market, but Twinkies are probably the most valuable of the Hostess products.  So relax, you should be able to grab a package of Twinkies or Cupcakes at your local 7-11 again very soon.

Carl Starrett

Carl Starrett is a consumer bankruptcy attorney in San Diego, California helping debtors file for protection under Chapter 13 and Chapter 7 of the Bankruptcy Code.

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