Thursday, November 29, 2012

Hostess asks judge to approve additional $1.8 million in executive bonuses


Texas-based Hostess Brands Inc. asked a judge on Wednesday to approve an additional $1.9 million in executive bonuses, according to The Associated Press, saying the money is needed to keep top managers on as the company sells off all its assets.
The now-defunct company, which rakes in more than $2.5 billion in annual sales, closed its doors earlier this month amid a strike by its unionized workers who refused to accept wage cuts. Despite still-heavy sales, the company declared bankruptcy twice in recent years as its revenues gradually fell. Many critics blamed the company’s net loss of $1.1 billion in FY 2012 on its failure to diversify into more healthy snacks.
The company’s most recent court filing asks New York-based bankruptcy Judge Robert Drain to give final approval of managements plans to liquidate its assets.
If approved, the move would be the final defeat for the company’s union, which saw Judge Drain order significant concessions from the workers earlier this month.
In addition to laying off more than 18,000 workers, the company stopped contributing to its union pension plans some time ago and now owes workers more than $111 million.
Gregory Rayburn, the company’s interim CEO, told The Dallas Morning News on Wednesday that more than 80 firms have lined up to buy out the company’s assets, in a series of sales that could pull in more than $1 billion. It is possible that the unionized workers could be hired on by one of those other companies.

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