ATLANTA - Hostess Brands is scheduled to enter a White Plains, NY courtroom Monday to begin the process of selling itself off as part of its bankruptcy divestiture process.
Federal Bankruptcy Judge Robert Drain will hear the case and eventually assign a liquidation company to sell the company's assets.
University of Michigan Law School professor John Pottow, who specializes in bankruptcy,told our Westchester County, NY sister newspaper The Journal News that the process could take as long as a year to unfold. He said that with the large brand recognition and more than $2 billion in revenue annually, other companies are definitely interested in picking over the pieces of Hostess.
Twinkies, by themselves, have landed $68 million in revenue so far this year.
"There's a huge amount of goodwill with the commercial brand name," Pottow said. "It's quite conceivable that they can sell the name and recipe for Twinkies to a company that wants to make them."
Three significant names have been bandied about as suitors for the parts of Hostess.
Thomasville, Ga., based Flowers Foods, makers of Nature's Own bread, Roman Meal bread and, since purchasing it in 2011, Tastykake. Private equity Metropoulos & Co. owns Los Angeles-based Pabst Brewing Company. Groupo Bimbo is the world's largest baking company, headquartered in Mexico City, and already owns the rights to make and distribute Wonder Bread in Mexico. Bimbo also owns Arnold brand breads, Brownberry Bread, Entenmann's Bakeries, Thomas' English Muffins and Sara Lee bakeries in the United States.
Hostess spokesman Lance Ignon told The Journal News there is a possibility that some of Hostess' brands may never return to operation because the industry has too much bakery capacity at the present time.
"We think there's a lot of value in the brands, and we'll certainly be trying to maximize value, both of the brands and the physical assets," Ignon said.
Hostess moved last Friday to liquidate its assets after a strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union earlier this month crippled the baker. Union workers went on strike after the company's latest bankruptcy court-imposed contract terms were rejected by the union. More than 18,000 employees nationally were idled by the decision.
After word of the liquidation emerged late last week, consumers snapped up much of the stock of Hostess snacks at many stores around the nation. The snacks have also started appearing on internet auction sites at vastly inflated prices.