The maker of the iconic cream-filled cakes said the close-down would mean that most of its 18,500 employees would lose their jobs.
The Irving, Texas-based company revealed that it decided to liquidate the company after determining that not enough employees had returned to work by a deadline on Thursday.
The company, which filed for bankruptcy in January, said it had filed a motion with U.S. Bankruptcy Judge Robert Drain in White Plains, New York, for permission to go out of business, The Telegraph writes.
“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” Chief Executive Gregory Rayburn said in a statement.
“Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders,” Rayburn added.
Union President Frank Hurt said on Thursday that the crisis at the company was the “result of nearly a decade of financial and operational mismanagement.”
He continued, adding that management was trying to make striking workers the scapegoats for a plan by Wall Street investors to sell Hostess.
However, as The Huffington Post reports, C. Dean Metropoulos and Co., the Greenwich-based firm behind blue-collar-cum-hipster-darling beer, Pabst Blue Ribbon, is thinking over a possibility to buy Hostess Brands, Inc.
“Our family would love to purchase these iconic brands,” Daren Metropoulos, a principal at the Connecticut private equity firm, told reporters.
“We are actively pursuing this deal as no doubt strategics will also.” Adding, “We have analyzed this opportunity very carefully for a few years now. Shedding the complications of the unions and old plants makes it even more attractive.”
The firm specializes in buying and revitalizing bankrupt brands like Chef Boyardee pasta products, PAM cooking spray, and Bumble Bee tuna.
Last year Metropoulos purchased Pabst, North America’s largest privately-held brewer, for $250 million.
Rayburn echoed Metropoulos’ point on unions, saying that buyers’ interests piqued after union ties severed.
“Nobody wants to have anything to do with these old plants or these unions or these contracts,” Hostess Chief told reporters.
Business research firm PrivCo suggested that Hostess brands such as Ho Hos and Wonder Bread could fetch $1 billion in an asset sale.
There’re also rumors that Grupo Bimbo, a Mexican mega-bakery that is considered to be one of world’s largest bread baker, may also make an offer.
However, Rayburn revealed that this is a “misconception” and that “due to antitrust, it would never happen.”
Wonder Bread was the most recognizable brand of sliced bread in the U.S history of the last decades. It’s the only brand that’s ever truly been national, Time claims.
“It’s as American as a white picket fence. And in grocery stores throughout the country, it’s ubiquitous,” the publication adds.
Since the 1950s and ’60s, toast has been a staple of most breakfasts, while bread has been on the dinner table in almost every household.