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Mon Nov 19, 2012, 02:35 PM

Hostess Liquidation Too Sweet for Managers, U.S. Says.

Source: nyt/reuters

Hostess Brands Inc, the maker of the iconic Twinkies snack cake, will square off in a bankruptcy court on Monday against an agent of the U.S. Justice Department, who says the wind-down plan is too generous to management.

The U.S. Trustee, an agent of the U.S. Department of Justice who oversees bankruptcy cases, said in court documents it is opposed to the wind-down plan because Hostess plans improper bonuses to company insiders.

The 82-year-old Hostess wants permission to pay senior management a bonus of up to 75 percent of their annual pay so they will stay on and help wind-down the business.

The U.S. Trustee, Tracy Hope Davis, planned to ask New York Bankruptcy Court Judge Robert Drain at Monday's afternoon hearing to appoint an independent trustee to oversee the sales of the company's assets.

Several unions also objected to the company's plans, saying they made "a mockery" of laws protecting collective bargaining agreements in bankruptcy. The Teamsters, which represents 7,900 Hostess workers, said the company's plan would improperly cut the ability of remaining workers to use sick days and vacation.



Read more: http://www.nytimes.com/reuters/2012/11/19/business/19reuters-hostess-bankruptcy-hearing.html?hp

22 replies, 4232 views

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Arrow 22 replies Author Time Post
Reply Hostess Liquidation Too Sweet for Managers, U.S. Says. (Original post)
elleng Nov 2012 OP
hedgehog Nov 2012 #1
PoliticAverse Nov 2012 #2
aquart Nov 2012 #3
Mz Pip Nov 2012 #6
AndyTiedye Nov 2012 #4
elleng Nov 2012 #5
are_you_serious_1234 Nov 2012 #7
bloomington-lib Nov 2012 #8
xtraxritical Nov 2012 #9
DirkGently Nov 2012 #10
elleng Nov 2012 #11
DirkGently Nov 2012 #12
elleng Nov 2012 #13
DirkGently Nov 2012 #15
mulsh Nov 2012 #19
Ash_F Nov 2012 #14
Selatius Nov 2012 #16
csziggy Nov 2012 #20
LineLineLineNew Reply +
underpants Nov 2012 #22
Quantess Nov 2012 #17
Old Union Guy Nov 2012 #18
underpants Nov 2012 #21

Response to elleng (Original post)

Mon Nov 19, 2012, 02:35 PM

1. Change we can believe in!

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Response to elleng (Original post)

Mon Nov 19, 2012, 02:37 PM

2. "help wind-down the business" - haven't they 'helped' enough already ? n/t

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Response to PoliticAverse (Reply #2)

Mon Nov 19, 2012, 02:51 PM

3. I'm sure companies are just panting to hire them.

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Response to aquart (Reply #3)

Mon Nov 19, 2012, 03:22 PM

6. Seriously.

I doubt there's a huge demand for their services that they need that huge incentive to stick around.

Let them leave. It shouldn't make things any worse than they already are for the company.

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Response to elleng (Original post)

Mon Nov 19, 2012, 02:56 PM

4. Cutting off Their Retirees' Pensions & Stealing the Employees Vacation Time for Executive Bonuses


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Response to AndyTiedye (Reply #4)

Mon Nov 19, 2012, 03:01 PM

5. Won't work, imo.

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Response to elleng (Original post)

Mon Nov 19, 2012, 03:52 PM

7. "...they will stay on and help wind-down the business...."

That's rich. (Puns intended)

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Response to elleng (Original post)

Mon Nov 19, 2012, 04:23 PM

8. They'll help carry away the money

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Response to bloomington-lib (Reply #8)

Mon Nov 19, 2012, 06:02 PM

9. Hostess brands will reemerge in a third world country too, you can bank on it.

 

The public's response of hording Hostess products guarantees it.

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Response to elleng (Original post)

Mon Nov 19, 2012, 07:23 PM

10. Now they've suddenly decided to mediate with the union.

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Response to DirkGently (Reply #10)

Mon Nov 19, 2012, 07:45 PM

11. They've 'decided' to mediate because bankruptcy judge required it.

Hostess, its lenders and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) agreed to mediation at the urging of Bankruptcy Judge Robert Drain of the Southern District of New York, who advised against a more expensive, public hearing regarding the company's liquidation.

"My desire to do this is prompted primarily by the potential loss of over 18,000 jobs as well as my belief that there is a possibility to resolve this matter," Drain said.

http://www.democraticunderground.com/1014311122

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Response to elleng (Reply #11)

Mon Nov 19, 2012, 08:18 PM

12. The court "urged." Not required.


But it sounds like the "urging" included a likelihood of conversion to Ch. 7.

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Response to elleng (Reply #13)

Mon Nov 19, 2012, 08:44 PM

15. Yes, the court "urged" the parties. Arms were twisted.


The judge made clear -- probably most strongly to Hostess -- that it should reconsider going to final hearing on its liquidation plan. The U.S. Trustee was opposed, based in part on proposed "retention bonuses" and was asking the case be converted to a Ch. 7, which would take the ball out of management's hands and put a panel trustee -- a court-appointed liquidator -- in charge.

Judges do this all the time. It's not an order, so much as a strong hint that you maybe don't want to see what an Order would say, if you pushed things further.

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Response to elleng (Reply #11)

Sun Nov 25, 2012, 08:54 AM

19. Aftere one day mediation failed. that happened last week.

here's the Wall Street Journal's take on the matter.

http://online.wsj.com/article/SB10001424127887323713104578131502378821868.html

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Response to elleng (Original post)

Mon Nov 19, 2012, 08:35 PM

14. This is what the Dem talking point on this needs to be

The company was going down no matter what thanks to their negligence. They were just milking it for as much as they could before it went down.

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Response to Ash_F (Reply #14)

Tue Nov 20, 2012, 06:08 AM

16. Some private equity firms purposely do this to companies they buy to make a quick profit.

They buy a company. They make the company take on debt. A hefty chunk of that debt is large bonuses to senior executives and shareholders who are in on the game. Then they dump the company either before or during its Ch. 11 bankruptcy.

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Response to Selatius (Reply #16)

Sun Nov 25, 2012, 09:00 AM

20. That's the Bain {Vulture} Capital business plan! n/t

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Response to Selatius (Reply #16)

Sun Nov 25, 2012, 11:43 AM

22. +

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Response to elleng (Original post)

Sun Nov 25, 2012, 08:03 AM

17. K & R

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Response to elleng (Original post)

Sun Nov 25, 2012, 08:27 AM

18. This is what they were after in the first place. n/t

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Response to Old Union Guy (Reply #18)

Sun Nov 25, 2012, 11:43 AM

21. Yep!

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