Just three short years after exiting bankruptcy, Hostess Brands Inc. files for Chapter 11 bankruptcy, again. The maker of treats such as Twinkies and Wonder Bread, Hostess found itself in bankruptcy protection between 2004 and 2009. Having emerged relatively organized, the snack maker is once again in deep water.
Troubling Times For Sweet Treats
The Texas-based snack company blames its financial problems on overwhelming pension and medical benefits obligations, increased competition and the brutal effects of a troubled economy.
In their filing, Hostess admitting to owing around $945 million and $11.8 million to two large pension fund creditors. Now stating that their previous Chapter 11 case wasn’t successful in adequately restructuring its debt, Hostess is in need of protection once again to resolve its near $1 billion in debt liabilities.
The President and CEO of Hostess, Brian Driscoll, reported that the company is working to resolve its agreements with unions and pension fund groups, as well as remain operative. However, the snack company will only be able to maintain operations with a $75 million financing commitment from a group of lenders.