Hostess' Chapter 22

While bankruptcy is very often a difficult process for many companies, the second bankruptcy for Hostess this decade is definitely not a piece of cake. A recent article outlines how the original bankruptcy process looked like it would allow Hostess to move forward as a going, profitable concern. However, the recent recession coupled with Hostess' high labor costs and high leverage have forced the company back into bankruptcy court. The company pension plan is underfunded by about $2 billion and labor relations are stained. If the pension liability is eliminated by the bankruptcy court, the Teamsters Union has already had a strike by its members ratified. And while it is difficult to liquidate a Twinkie, the manufacturer of this iconic yellow treat may be headed for such a fate.