The reprieve for about 300 Hostess Brands employees in Northeast Philadelphia lasted about one day.
The bread and snack cake manufacturer based in Irving, Texas, announced late Tuesday plans to shut down operations permanently and liquidate its assets as a result of its bankruptcy and a 12-day-old labor strike involving one of its largest employee unions.
Workers at the company’s Northeast plant, at Grant Avenue and Blue Grass Road, stand to lose their jobs, as do about 18,500 employees nationally.
On Wednesday morning, a federal bankruptcy judge in White Plains, N.Y., granted the company permission to commence with its “liquidation scenario,” according to The Dallas Morning News. Judge Robert Drain had on Monday urged Hostess officials and leaders of the striking Bakers, Confectionary, Tobacco Workers and Grain Millers union to meet in a last-ditch effort to resolve a contract dispute, but talks broke down on Tuesday without a compromise, the company said.
Hostess, which manufactures Wonder Bread, Twinkies and other baked products under various brand names, has been in Chapter 11 bankruptcy reorganization since January. It is the company’s second bankruptcy filing in the last decade.
The company’s largest employee union, the Teamsters, resolved their own contract dispute with the company earlier this year and took part in Tuesday’s BCTWGM contract talks. BCTWGM represents about 5,000 Hostess workers.
According to the Washington Post, Hostess has asked to shut down 36 bakeries, 242 depots, 216 retail stores and 311 hybrid depot-store facilities as part of its liquidation. The facilities span 22 states.
The company also plans to sell its iconic brand names. In court on Wednesday, a company attorney told Drain that the company has seen “very healthy competition” for its brands, the Morning News reported.
Hostess would initially focus on selling certain assets to “continue as a going concern” before conducting an open auction, the Dallas newspaper reported. ••EndFragment