Editing Interstate Bakeries (section)

=== <span class="anchor" id="Bankruptcy and liquidation (2012)"></span><span class="anchor" id="Potential bidders"></span> Bankruptcy and liquidation ===
In December 2011, it was reported that Hostess Brands was on the verge of filing for bankruptcy a second time. The company stopped paying future pension benefits after August, breaking its union contracts.<ref name="Hostess Brands Bankruptcy Eyed">{{cite web|url=http://www.nypost.com/p/news/business/hostess_filing_in_mix_PbYFRcu6zEHZw4NM0RAyVM|title=Hostess Brands Bankruptcy Eyed|work=New York Post|date=December 22, 2011}}</ref> According to a Hostess employee, "We understand that, should we pursue some form of legal action to require the company to live up to the terms of the contract, they may close, but we have come to believe that they will close anyway. We believe the company is poorly managed and the only hope is a complete change in management".<ref name="Hostess Brands Bankruptcy Eyed"/>

On January 10, 2012, Hostess Brands filed for Chapter 11 bankruptcy for the second time. In its filing, the company said it "is not competitive, primarily due to legacy pension and medical benefit obligations and restrictive work rules". According to Hostess, it employed 19,000 people and was more than $860 million in debt. The company said it would continue to operate with $75 million of [[debtor-in-possession financing]] from Monarch Alternative Capital, [[Silver Point Capital]] and other investors.<ref name="autogenerated1"/>

In March Brian Driscoll resigned as CEO<ref>{{cite web|last=Kosman|first=Josh|title=Hostess CEO resigns, fueling speculation of baker's liquidation|work=New York Post|date=May 9, 2012|url=http://www.nypost.com/p/news/business/humble_pie_at_hostess_vEahL6ZJbXfJreTbKpVDVP|access-date=November 15, 2012}}</ref> and was replaced by [[Gregory F. Rayburn]], who had been hired as [[chief restructuring officer]] nine days earlier. ''[[Fortune (magazine)|Fortune]]'' reported that unions in the company were unhappy with Driscoll's proposed compensation package of $1.5 million, plus cash incentives and $1.95 million in long-term compensation. The court had discovered that Hostess executives received raises of up to 80 percent the previous year. Rayburn cut the salaries of the four top Hostess executives to $1, to be restored by January 1 of the following year or earlier.<ref>{{cite web|last=Kaplan|first=David|title=Hostess is bankrupt... again|work=Fortune|date=July 26, 2012|url=http://management.fortune.cnn.com/2012/07/26/hostess-twinkies-bankrupt|access-date=November 15, 2012|url-status=dead|archive-url=https://web.archive.org/web/20121116142747/http://management.fortune.cnn.com/2012/07/26/hostess-twinkies-bankrupt/|archive-date=November 16, 2012|df=mdy-all}}</ref>

In July 2012, the ''[[New York Post]]'' reported that negotiations with the [[Teamsters Union]], led by Silver Point Capital, were close to an agreement allowing Hostess Brands to cut employee pay and benefits if the company continued funding its pension plans.<ref>{{cite news|last=Kosman|first=Josh|title = Skinny on cake talks|quote=Cuts for Hostess workers|work=New York Post|date=July 2, 2012|url=http://www.nypost.com/p/news/business/skinny_on_cake_talks_jxDdlbcwKjCb3ETI4EIXQO|access-date=July 7, 2012}}</ref> In May, as required by the [[Worker Adjustment and Retraining Notification Act]], the company's 19,000 workers were warned of a possible layoff. In an email to the [[Marysville, California]] ''[[Appeal-Democrat]]'', Hostess spokesman Erik Halvorson wrote that the May notices were to alert employees to a possible sale of the company but "our goal is still to emerge from bankruptcy as a growing company with a strong future".<ref>{{cite news|last=Gebb|first=Ashley|title=Thirteen jobs at risk at Yuba City Hostess outlet|quote=We are simply fulfilling our requirements by sending these notices.|work=Appeal-Democrat|date=July 4, 2012|url=http://www.appeal-democrat.com/articles/hostess-117574-yuba-city.html|archive-url=https://archive.today/20130117022105/http://www.appeal-democrat.com/articles/hostess-117574-yuba-city.html|url-status=dead|archive-date=January 17, 2013|access-date=July 7, 2012|location=Marysville, California}}</ref> Although the layoff notices listed July 7–21 as dates, on July 5 another company spokesman told the ''[[Financial News & Daily Record]]'' that there were no immediate plans to lay off Hostess employees.<ref>{{cite news|last=Mathis|first=Karen|title=Hostess: No immediate plans for employee layoffs|quote=The goal is to restructure Hostess and come out of Chapter 11 as a stronger company.|work=Financial News & Daily Record|date=July 6, 2012|url=http://www.jaxdailyrecord.com/showstory.php?Story_id=536915|access-date=July 7, 2012}}</ref>

In November 2012, Hostess employees nationwide went on strike. The [[Bakery, Confectionery, Tobacco Workers and Grain Millers International Union]] (BCTGM), representing 6,600 Hostess employees, took action after a contract proposal from Hostess Brands was rejected by 92&nbsp;percent of its members.<ref>{{cite news|last=Benson|first=Lisa|title=Hostess Brand workers hit the picket lines|work=KSHB-TV|date=November 10, 2012|url=http://www.kshb.com/dpp/news/local_news/hostess-brands-workers-hit-the-picket-lines#ixzz2BsF9kRqF|access-date=November 10, 2012|archive-url=https://web.archive.org/web/20121114005013/http://www.kshb.com/dpp/news/local_news/hostess-brands-workers-hit-the-picket-lines#ixzz2BsF9kRqF|archive-date=November 14, 2012|url-status=dead|df=mdy-all}}</ref>

On November 16, Hostess announced that it was ceasing its plant operations and laying off most of its 18,500 employees. The company said that it intended to sell off its assets (including its well-known brand names) and liquidate.<ref>{{cite web|url=https://money.cnn.com/2012/11/16/news/companies/hostess-closing|title= Hostess Brands closing for good|date= November 16, 2012|work=CNN Business|access-date=November 16, 2012 }}</ref><ref>{{cite web|url=https://www.wsj.com/articles/SB10001424127887324556304578122632560842670 |title= Twinkie Maker Hostess to Close|date= November 16, 2012|work=The Wall Street Journal|access-date=November 16, 2012 }}</ref> According to CEO Gregory Rayburn, "Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders."<ref>{{cite news|last1=Milford|first1=Phil|last2=McCarty|first2=Dawn|last3=Rochelle|first3=Bill|title=Twinkie Maker Hostess to Shut Down After Strike|work=Bloomberg|date=November 16, 2012|url=https://www.bloomberg.com/news/2012-11-16/twinkie-maker-hostess-to-shut-down-after-strike.html|access-date=November 16, 2012}}</ref><ref>{{cite web|url=http://www.huffingtonpost.com/2012/11/16/hostess-brands-liquidation_n_2143284.html|title= Hostess Brands Liquidation: Twinkie-Maker Seeks Court Permission To Liquidate|date=November 16, 2012|work=Huffington Post|access-date=November 16, 2012}}</ref> A BCTGM press release issued that day read in part, "When a highly-respected financial consultant, hired by Hostess, determined earlier this year that the company's business plan to exit bankruptcy was guaranteed to fail because it left the company with unsustainable debt levels, our members knew that the massive wage and benefit concessions the company was demanding would go straight to Wall Street investors and not back into the company."<ref>[http://www.bctgm.org/PDFs/HostessPressRelease11-16-12.pdf HOSTESS DEMISE A DECADE IN THE MAKING(pdf)] BCTGM International Union. Retrieved: 19 November 2012.</ref>

According to Rayburn, potential buyers expressed interest in acquiring the Hostess brand.<ref>{{cite web|url=https://abcnews.go.com/blogs/business/2012/11/twinkies-may-find-buyer-hostess-ceo-says|title=Twinkies May Find Buyer, Hostess CEO Says|work=ABC News|date=November 19, 2012|access-date=November 20, 2012}}</ref> On November 21, Judge Robert Drain cleared Hostess to close.<ref name="closing"/> In approving the plan, Drain ruled against [[United States Trustee Program|U.S. Trustee for the Southern District]] Tracy Hope Davis' motion to convert the bankruptcy to a [[Chapter 7, Title 11, United States Code|Chapter 7 bankruptcy]] with an appointed [[Trustee in bankruptcy|trustee]] to oversee liquidation. Davis criticized the plan's provisions, which would {{"'}}grant bonuses to insiders' and 'cherry-pick' which administrative claims get paid".<ref>{{cite web|url=https://www.cbsnews.com/news/hope-for-twinkies-as-hostess-union-go-to-mediation/|title=Hope for Twinkies as Hostess, union go to mediation|last=Hoffman|first=Constantine|work=CBS Moneywatch|date=November 20, 2012|access-date=November 26, 2012}}</ref> Drain left Rayburn in charge of the liquidation; Hostess had argued that its assets would devalue if the company had to wait for a trustee to get up to speed on the company.<ref>{{cite web|url=http://www.standard.net/stories/2012/11/26/hostess-begins-firings-competitors-eye-brands|title=Hostess begins firings as competitors eye brands|last=McCarty|first=Dawn|work=Standard-Examiner|date=November 26, 2012|access-date=November 26, 2012|archive-url=https://web.archive.org/web/20121129123714/http://www.standard.net/stories/2012/11/26/hostess-begins-firings-competitors-eye-brands|archive-date=November 29, 2012|url-status=dead|df=mdy-all}}</ref> Hostess Brands' liquidation plan was finalized by a federal bankruptcy judge on November 29.<ref>{{cite web|url=http://www.chicagodefender.com/index.php/business/15369-judge-ok-s-bonuses-for-execs-in-hostess-liquidation|title=Judge OK's Bonuses for Execs in Hostess Liquidation|last=O'Toole|first=James|work=Chicago Defender|date=November 30, 2012|access-date=November 30, 2012|archive-url=https://web.archive.org/web/20121206060759/http://www.chicagodefender.com/index.php/business/15369-judge-ok-s-bonuses-for-execs-in-hostess-liquidation|archive-date=December 6, 2012|url-status=dead|df=mdy-all}}</ref> In January 2013, the company asked a judge to set a March 21 deadline for workers to file back-pay claims.<ref>{{cite news|url=https://www.bloomberg.com/news/2013-01-24/hostess-brands-asks-judge-to-approve-march-21-claims-bar-date.html|title=Hostess Asks Judge to Approve March 21 Claims Deadline|last=Milford|first=Phil|work=Bloomberg|date=January 24, 2013|access-date=January 24, 2013}}</ref> On February 11, a U.S. Bankruptcy Court judge in New York approved [[stalking horse offer|stalking horse]] bidders for Hostess Brands.<ref>{{cite web|url=http://www.bizjournals.com/dallas/news/2013/02/11/court-approves-lead-bids-for-hostess.html|title=Court approves lead bids for Hostess' Brands|last=Murray|first=Lance|work=Dallas Business Journal|date=February 11, 2013|access-date=February 11, 2013}}</ref><ref>{{cite web|url=http://www.csnews.com/top-story-candy___snacks-hostess_gets_court_ok_to_auction_twinkies__drake_s_brands-62799.html|title=Hostess Gets Court OK to Auction Twinkies, Drake's Brands|work=Convenience Store News|date=February 11, 2013|access-date=February 11, 2013|archive-url=https://web.archive.org/web/20130215025412/http://www.csnews.com/top-story-candy___snacks-hostess_gets_court_ok_to_auction_twinkies__drake_s_brands-62799.html|archive-date=February 15, 2013|url-status=dead|df=mdy-all}}</ref><ref>{{cite web|url=http://www.investorplace.com/2013/02/hsotess-gets-ok-to-auction-off-brands|archive-url=https://archive.today/20130411035139/http://www.investorplace.com/2013/02/hsotess-gets-ok-to-auction-off-brands|url-status=dead|archive-date=April 11, 2013|title=Hostess Gets OK to Auction Off Brands|last=Freeburn|first=Christopher|work=Investor Place|date=February 12, 2013|access-date=February 12, 2013}}</ref><ref>{{cite web|url=http://www.ksnt.com/news/local/story/Hostess-Brands-gets-approval-to-sell-assets/eAWJ5ca6WUWtZdpiCzaZqw.cspx|title=Hostess Brands gets approval to sell assets|work=KSNT|date=February 12, 2013|access-date=February 12, 2013}}{{dead link|date=March 2018 |bot=InternetArchiveBot |fix-attempted=yes }}</ref>

The company received bids for assets from [[Walmart]], [[Target Corporation|Target]], [[Kroger]], [[Flowers Foods]] and [[Grupo Bimbo]],<ref>{{cite web|url=http://newyork.newsday.com/business/hostess-bidders-include-wal-mart-kroger-1.4330155|title=Hostess bidders include Wal-Mart, Kroger|work=Newsday|date=December 13, 2012|access-date=December 14, 2012|archive-url=https://web.archive.org/web/20130324103114/http://newyork.newsday.com/business/hostess-bidders-include-wal-mart-kroger-1.4330155|archive-date=March 24, 2013|url-status=dead|df=mdy-all}}</ref><ref>{{cite web|url=http://money.msn.com/now/post.aspx?post=d1d6ece8-bb35-4402-922d-221f7e2aa48a|title=Wal-Mart wants to save the Twinkie|last=Berr|first=Jonathan|work=MSN Money|date=December 14, 2012|access-date=December 14, 2012|archive-url=https://web.archive.org/web/20121218014251/http://money.msn.com/now/post.aspx?post=d1d6ece8-bb35-4402-922d-221f7e2aa48a|archive-date=December 18, 2012|url-status=dead}}</ref><ref>{{cite news|url=https://www.bloomberg.com/news/2012-12-13/hostess-said-to-attract-bids-from-wal-mart-kroger.html|title=Hostess Said to Attract Bids From Wal-Mart, Kroger|last1=McCracken|first1=Jeffrey|last2=Jinks|first2=Beth|work=Bloomberg|date=December 13, 2012|access-date=December 14, 2012}}</ref><ref>{{cite web|url=http://www.upi.com/Business_News/2013/01/06/Bidders-line-up-for-Hostess/UPI-15521357485533|title=Bidders line up for Hostess|work=UPI|date=January 6, 2013|access-date=January 6, 2013}}</ref> and was expected to sell its snack-cake and bread brands during 2013.<ref>{{cite web|url=http://fox8.com/2012/12/22/twinkie-time-snack-favorites-could-soon-return|title=Twinkie Time? Snack Favorites Could Soon Return|last=Sutyak|first=Kara|work=Fox 8 Cleveland|date=December 22, 2012|access-date=December 23, 2012}}</ref><ref>{{cite web|url=http://articles.philly.com/2012-12-22/business/35970975_1_hostess-brands-joshua-scherer-bids|archive-url=https://archive.today/20130131142512/http://articles.philly.com/2012-12-22/business/35970975_1_hostess-brands-joshua-scherer-bids|url-status=dead|archive-date=January 31, 2013|title=Hostess brands to be shared|last=Choi|first=Candace|work=Philly.com|date=December 22, 2012|access-date=December 23, 2012}}</ref><ref>{{cite web|url=http://www.vendingmarketwatch.com/news/10847817/hostess-expects-to-split-up-snack-cakes-in-sale|title=Hostess expects to split up snack cakes in sale|last=Choi|first=Candice|work=Vending Market Watch|date=January 2, 2013|access-date=January 2, 2013}}{{dead link|date=March 2018 |bot=InternetArchiveBot |fix-attempted=yes }}</ref><ref>{{cite web|url=http://www.just-food.com/news/hostess-sale-will-most-likely-lead-to-break-up_id121613.aspx|title=US: Hostess sale will "most likely" lead to break up|last=Askew|first=Katy|work=Just Food|date=January 3, 2013|access-date=January 4, 2012|archive-date=January 29, 2013|archive-url=https://web.archive.org/web/20130129091457/http://www.just-food.com/news/hostess-sale-will-most-likely-lead-to-break-up_id121613.aspx|url-status=dead}}</ref>
On January 8, 2013, Hostess Brands hired Hilco to sell its equipment, machinery and real estate.<ref>{{cite web|url=http://www.chicagotribune.com/business/breaking/chi-northbrook-firm-to-handle-hostess-real-estate-equipment-sale-20130108,0,1789851.story|title=Northbrook firm to handle Hostess' real estate, equipment sale|last=Yerak|first=Becky|work=Chicago Tribune|date=January 8, 2013|access-date=January 8, 2013}}</ref> Three days later the company announced a $390 million stalking-horse bid by Flowers Foods for six of its bread brands (including Wonder Bread),<ref name="Flowers">{{cite web|url=http://www.huffingtonpost.com/2013/01/11/hostess-wonder-bread-sale_n_2460546.html|title=Hostess To Sell Wonder Bread, Other Bread Business To Flower Foods For $390 Million|last=Choi|first=Candice|work=The Huffington Post|date=January 11, 2013|access-date=January 12, 2013}}</ref> and court approval was received for a February 28 auction of the brands.<ref>{{cite web|url=https://www.bloomberg.com/news/2013-01-25/hostess-receives-court-approval-to-hold-february-28-asset-auction.html|title=Hostess Receives Court Approval to Hold Feb. 28 Asset Auction|last=McCarty|first=Dawn|work=Bloomberg|date=January 25, 2013|access-date=January 25, 2013}}</ref>

On January 15, 2013, Hostess Brands began searching for a stalking-horse bidder for its snack cakes;<ref>{{cite web|url=http://www.thedeal.com/content/restructuring/hostess-turns-auction-attention-to-cake-business.php|title=Hostess turns auction attention to cake business|last=Mason|first=Jamie|work=The Deal|date=January 15, 2013|access-date=January 15, 2013|url-status=dead|archive-url=https://web.archive.org/web/20130117015238/http://www.thedeal.com/content/restructuring/hostess-turns-auction-attention-to-cake-business.php|archive-date=January 17, 2013|df=mdy-all}}</ref> four companies (Grupo Bimbo, a partnership of [[Apollo Global Management]] and C. Dean Metropoulos and Company, Hurst Capital and [[McKee Foods]]) were negotiating.<ref name="Bimbo Apollo">{{cite web|url=http://bizbeatblog.dallasnews.com/2013/01/bimbo-apollo-in-the-hunt-for-twinkies-report.html|title=Bimbo, Apollo in the hunt for Twinkies: report|last=Robinson-Jacobs|first=Karen|work=Dallas News|date=January 17, 2013|access-date=January 17, 2013|archive-url=https://web.archive.org/web/20130121032302/http://bizbeatblog.dallasnews.com/2013/01/bimbo-apollo-in-the-hunt-for-twinkies-report.html/|archive-date=January 21, 2013|url-status=dead}}</ref><ref name="Take">{{cite web|url=http://www.cspnet.com/news/snacks-and-candy/articles/who-will-take-cakes|title=Who Will Take the Cakes?|work=CSP Daily News|date=January 22, 2013|access-date=January 22, 2013|archive-url=https://web.archive.org/web/20130126111528/http://www.cspnet.com/news/snacks-and-candy/articles/who-will-take-cakes|archive-date=January 26, 2013|url-status=dead}}</ref><ref>{{cite web|url=https://finance.yahoo.com/news/report-mckee-foods-seeking-hostess-174917327.html|title=Report: McKee Foods seeking Hostess' Drake's brand|work=Yahoo! Finance|date=January 26, 2013|access-date=January 26, 2013}}</ref> Two weeks later the company picked Apollo Global Management and C. Dean Metropoulos and Company as lead bidder for its snack cakes,<ref name="Apollo">{{cite web|url=http://www.businessweek.com/news/2013-01-29/hostess-said-to-pick-apollo-group-as-lead-bidder-for-cake-brands|archive-url=https://archive.today/20130215163926/http://www.businessweek.com/news/2013-01-29/hostess-said-to-pick-apollo-group-as-lead-bidder-for-cake-brands|url-status=dead|archive-date=February 15, 2013|title=Hostess Said to Pick Apollo, Metropoulos as Lead Cake Bid|last1=Jinks|first1=Beth|last2=Alesci|first2=Cristina|work=Bloomberg Business Week|date=January 29, 2013|access-date=January 29, 2013}}</ref><ref name="Tribune">{{cite web|url=https://www.chicagotribune.com/2013/01/31/twinkies-bidders-apollo-metropoulos-submit-410m-offer/|title=Twinkies bidders: Apollo, Metropoulos submit $410M offer|work=Chicago Tribune|date=January 31, 2013|access-date=March 1, 2013}}</ref><ref>{{cite web|url=http://www.nasdaq.com/article/apollo-global-management-confirms-purchase-of-certain-hostess-assets-shares-up-45-hit-new-52-week-highs-cm212833|title=Apollo Global Management Confirms Purchase of Certain Hostess Assets - Shares Up 4.5%, Hit New 52 Week Highs|last=Trader|first=Midnight|work=Nasdaq|date=January 31, 2013|access-date=January 31, 2013}}</ref><ref>{{cite web|url=http://www.tulsaworld.com/business/article.aspx?subjectid=461&articleid=20130226_461_0_Apollo878861|title=Apollo seeks $450 million loan for Hostess snack-cake unit|last=Amato|first=Michael|work=Tulsa World|date=February 26, 2013|access-date=February 26, 2013}}</ref> with the bid deadlines for all Hostess brands March 11 and 12.<ref>{{cite web|url=http://www.bakingbusiness.com/articles/news_home/Business/2013/03/Bid_deadlines_for_Hostess_busi.aspx?ID={D17CB88D-E6C3-4E5C-B0D9-061A47B0FDDA}|title=Bid deadlines for Hostess businesses set for next week|last=Schroder|first=Eric|work=Baking Business|date=March 8, 2013|access-date=March 8, 2013}}</ref>