Sitrick & Co. is handling the high-profile bankruptcy filing of Hostess Brands, the maker of Twinkies, Hostess cupcakes, Ding Dongs, Drake’s cakes and Wonder bread.
The Irving, Tex-based company blames a lackluster economy and non-competitive cost structure for forcing it to once again return to Chapter XI. The company emerged from bankruptcy in February 2009.
Hostess blames the current economic stress on legacy pension and medical benefit obligations and restrictive work rules. The company says it has more than 370 labor contracts with its 19,000-member workforce.
Hostess has received $75M in debtor-in-possession financing from a group of lenders led by Silver Point Capital.
CEO Brian Driscoll believes a restructuring will unleash the full potential of “some of our industry’s most powerful and resilient brands.”
Twinkies, for instance, were born in the Great Depression as a low-cost snack. Banana rationing during WWII forced a switch to the current vanilla cream filling.
Hostess runs 36 bakeries, 565 distribution centers and 570 outlet stores in the U.S.