Phoenix Bankruptcy Law News

Walmart, Kroger to Bid on Hostess Brands

Walmart could be the new maker of Twinkies and HoHos. According to Bloomberg, there are about two dozen companies bidding on Hostess' assets, including Walmart and Kroger Co.

Some of the bidders are reportedly interested all of Hostess' assets, while others are only interested in specific brands like Twinkies. Overall, the liquidation could bring in as much $1 billion for the company's creditors, according to one financial advisor's calculations.

Other first-round bidders include Grupo Bimbo SAB and Alpha Baking Co., according to the Journal. C. Dean Metropoulos & Co., the private-equity firm that owns Pabst Brewing Co., is also planning to submit a bid.

The current bankruptcy isn't Hostess' first. Back in 2009, Hostess emerged from bankruptcy as a private company after Ripplewood Holdings LLC bought a controlling interest in the company.

The most recent bankruptcy was filed in January. A shift toward healthier eating caused the company's profits to suffer. Hostess filed for Chapter 11, hoping to restructure and become profitable again. In order to cut costs, Hostess tried to renegotiate its labor contracts.

That led to a standoff between Hostess and its bakers' union. The Bakery Confectionary Tobacco Workers and Grain Millers International Union went on strike last month, after the bankruptcy court approved labor contracts the union opposed.

Hostess gave the union an ultimatum: Return to work, or the company would be forced to lay off its workforce and liquidate its assets. The union refused, and liquidation became the new plan.

More than 18,000 workers will be let go as a result of the liquidation, some immediately and others in the upcoming months.

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