Hostess Files For Bankruptcy – The Twinkie-maker is in financial trouble again, after filing for Chapter 11 in 2004, the company is doing it again six years later, according to a confirmed source close to the company.
The Irving-based Texas company is said to be $860 million in debt, with about $50 million of it being outstanding, and has been operating at a loss. However, the company is estimated to make $2.5 billion in annual sales.
Hostess is blaming the high cost of labor the rising prices in commodities. There are around 19,000 employees working for Hostess, represented by several different unions.
Adding to problems vendors are aware of the finical downfalls of the company and are demanding quicker repayment of products.
It took Hostess 3 years to work its way out of bankruptcy in 2004 and it continued to struggle again afterwards.
This time the company is hoping to be able to renegotiate labor contracts through bankruptcy court. For filing a second time Hostess runs the chance of being liquidated to pay its debtors much like Polaroid was when it filed for a second time.
Hostess has been around since 1925 starting with ‘Wonder Bread’ and then Cakes. The company’s Cupcake has been called the best selling snack in history.