Iconic US Twinkie baker files for bankruptcy

Wednesday 11 January 2012 15.18
Maker of popular US snack food files for bankruptcy
Maker of popular US snack food files for bankruptcy

Hostess Brands, the baker of Twinkie cakes and other iconic American foods, filed for bankruptcy protection today after failing to win concessions on union contracts.

Founded in 1930, Hostess owns brands that were emblematic of American food for generations. Its popular Twinkie, a snack cake with a creamy filling, was launched that year. The company claims its Wonder bread, a vitamin-enriched sliced bread, was the first 100% natural bread available across the US.

The privately held company filed a Chapter 11 bankruptcy reorganisation in a New York federal court, less than three years after emerging from a 2004 bankruptcy filing. "Hostess has some of our industry's most powerful and resilient brands," said Brian Driscoll, president and chief executive of the Texas-based firm.

"With generations of loyal consumers, numerous iconic products and a talented and experienced workforce, Hostess Brands has tremendous inherent strengths to build upon."

Hostess also announced it had received a pledge of $75 million in financing from a group of its lenders to enable the company to continue routine operations while restructuring. The financing is subject to court approval.

The company said it did not anticipate any disruptions in the manufacturing and delivery of any of its bread or cake products. Hostess said it was forced to file for court-supervised bankruptcy protection because its cost structure was not competitive, mainly due to legacy pension and medical benefit obligations and restrictive work rules.

The US economic downturn added to the pressure from heightened competition, squeezing cash flows, it said.