Judge approves Hostess liquidation

Twinkies maker Hostess wins court OK to close

By Martinne Geller and Jonathan Stempel

NEW YORK | Wed Nov 21, 2012 4:06pm EST

(Reuters) – Hostess Brands Inc on Wednesday won permission from a U.S. bankruptcy judge to begin shutting down, and expressed optimism it will find new homes for many of its iconic brands, which include Twinkies, Drake’s cakes and Wonder Bread.

U.S. Bankruptcy Judge Robert Drain in White Plains, New York authorized current management, led by restructuring specialist Gregory Rayburn, to immediately begin efforts to wind down the 82-year-old company, a process expected to take one year.

“It appears clear to me that the debtors have taken the right course in seeking to implement the wind-down plan as promptly as possible,” Drain said near the end of a four-hour hearing.

The judge authorized Hostess to begin the liquidation process one day after his last-ditch mediation effort between the Irving, Texas-based company and its striking bakers’ union broke down.

Roughly 15,000 workers were expected to lose their jobs immediately, and most of the remaining 3,200 would be let go within four months.

“This is a tragedy, and we’re well aware of it,” Heather Lennox, a lawyer for Hostess, told the judge. “We are trying to be as sensitive as we can possibly be under the circumstances to the human cost of this.”

SALE PROSPECTS

Lennox said Hostess has received a “flood of inquiries” from