by SHARON CHANG
Hostess Brands Inc. is filing for Chapter 11 bankruptcy protection. They carry over $860 million in debt and owe more than $50 million to vendors. On top of that, Hostess is still under pressure for raising prices on their snacks that are high on sugar.
Although still in bankruptcy, Hostess Brands are keeping their hopes up on improving its employee costs. The company does not expect interruptions in any sales or delivery of their products while in bankruptcy. However, the company struggles with paying their employees and is lacking competitiveness.
“We have engaged in good-faith bargaining with our labor partners for many months. We remain hopeful that we can reach an agreement that will allow us to amend our labor contracts so that we can emerge from Chapter 11 as a highly competitive company that provides secure jobs for our employees,” said Hostess CEO Brian Driscoll in a statement after the bankruptcy filing was announced.
The former company, known as the Interstate Bakeries, went bankrupt for four years until they emerged as Hostess Brands in 2009. The owner of Hostess, Riverwood Holdings, had a tough time meeting interest payments.
This well-known company went from cream-filling to bankruptcy filing in a blink of an eye. For now, Hostess has secured their bankruptcy up to $75 million from a lender held by Silver Point Finance, which will allow Hostess to continue working their bakeries and their 570 of outlet stores.