While Hostess Brands Inc. got final approval for its wind-down plans in bankruptcy court Thursday, the future of Twinkies is not only virtually assured — it looks to only get sweeter..even as 18,000 jobs will be wiped out.
- Hostess Brands Inc. asked for a judge’s approval Thursday to give its top team bonuses totaling up to $1.8 million.
- Seeking final approval for its wind-down, which was approved on an interim basis last week.
- Bankrupt owner revealed it is in talks with 110 potential buyers.
The maker of Twinkies, Ding Dongs and Ho Hos says incentive pay is needed to retain the 19 managers during the liquidation process, which could take about a year. Two of those executives would be eligible for additional rewards depending on how efficiently they carry out the liquidation. Some of those executives would be eligible for additional rewards depending on how efficiently they carry out the liquidation. The compensation would be on top of their regular pay.
The bonuses do not include pay for CEO Gregory Rayburn, who was brought on as a restructuring expert earlier this year. Rayburn is being paid $125,000 a month.
The process includes the quick sale of its brands, which also include Wonder Bread. Hostess says it has received a flood of interest in the brands. The company’s bankruptcy means loss of about 18,000 jobs.
The sales process has been “so fast and furious” Hostess hasn’t been able to make the calls seeking buyers it previously intended, Joshua Scherer of Perella Weinberg Partners, an advisor to Hostess, said in court. “Not only are these buyers serious, but they are expecting to spend substantial sums,” he said.
Hostess expects to keep on about 3,200 staff – out of 18,000 – to help shut down its properties, but only about 200 of them are likely to still be employed at the firm by the end of March. Hostess said the liquidation would mean the closure of 33 bakeries, 565 distribution centres, approximately 5,500 delivery routes and 570 bakery outlet stores.
Many consumers hope that a buyer will emerge for the iconic Twinkies. While a small percentage of the overall pie, Twinkies produce $100 million in revenues for the company. During the hearing, one employee recalled the visit of a potential buyer to the Drake’s Cakes plant in Wayne, N.J., where roughly 200 people worked. The buyer, which remained unnamed, had one big concern: making sure he had enough people to run the place.
Hostess had already said last week that it was getting a flood of interest from potential buyers for its brands, which also include Devil Dogs and Wonder bread. The company has stressed it needs to move quickly to capitalize on the outpouring of nostalgia sparked by its liquidation.
“The longer these brands are off the shelves, the less they’re going to be valued,” Scherer said Thursday in U.S. Bankruptcy Court in the Southern District of New York in White Plains, N.Y.
Hostess Brands was founded in 1930 and had revenues of $2bn last year.