Hostess bankruptcy is bid to freeze driver pensions (Updates)

[xchrom]

http://www.philly.com/philly/blogs/inq-phillydeals/-Hostess-tries-to-stiff-Teamsters-on-pension-payments.html

Hostess, the nationwide bakery and delivery chain that made and sold $2.5 billion worth of Wonder Bread, Twinkies, Devil Dogs, Ring Dings, and other long-shelf-life snack cakes last year, hopes its new bankruptcy filing in New York, its second since 2004, will enable it to escape $860 milllion it owes retired truck drivers and other creditors so it can raise new capital and reorganize, chief executive Brian J. Driscoll said in a court filing. Read Driscoll's affidavit here.

In this statement. Hostess says its lead debtor, Greenwhich, Conn. buyout firm Silver Point Capital LP, has agreed to finance Hostess' continued operations, as it tries to win labor work rule, pension and medical care concessions, if the court approves. Silver Point, founded by ex-Goldman Sachs partners Edward Mule' and Robert J. O'Shea, is also an investor in the Crossroads casino project in Gettysburg, among other businesses. Silver Point didn't immediately respond to my question about how much money it took out of Hostess leading up to its latest bankruptcy.

Hostess' costs - including old debt from its many acquisitions as well as the Teamster pensions - "are not competitive with Little Debbie, Bimbo, J&J (Snack Foods), (Tastykakes owner) Flowers and other newer companies with a lot of capital and not as much debt," said Robert Costello, head of $50 million-plus Costello Asset Management in Huntingdon Valley.

"It's not that they are paying the guys that much. But new facilities are much more efficient" and have more money to boost marketing, he added. Costello holds a small position in Flowers but has mostly avoided the industry lately due to rising flour and commodity costs.

[Liberal_in_LA]

1. oh, so that's the plan

[leftyohiolib]

2. this shit has to stop. if i declare bankruptcy my obligation to my student loan is not forgiven

why do bullshit companies get to walk away from pension obligations.

[Demeter]

3. The Vampire Squid Strikes Again

[xchrom]

4. +1

[Octafish]

5. Corporate America

The joints are run by gangsters.

[Rex]

7. Yep, why is it always some scumbag from GFS

or JPMorgan-Stanley_Steamer-We Own The World?

[Octafish]

8. They've bought everything worth owning and sold it for whatever they can.

In the process, they also sold out everyone who used to have a "piece of the action," like the workers.

In politics, they sold out those who used to own the place, the citizens.

In both cases, the new proprietor class consider their victims, "mopes."

[JustABozoOnThisBus]

6. So, just another corporate fakeruptcy

like K-Mart and General Motors.

Surprise.