More Than 100 Bidders for Hostess’ Brands
$1.8 million in bonuses OK’d as selloff gets under way
NEW YORK -- The future of Twinkies is virtually assured, but not the 18,000 jobs of bankrupt Hostess Brands.
A federal bankruptcy judge approved wind-down plans late Thursday for the maker of Twinkies, Ding Dongs and Ho Hos, according to an Associated Press report. That included approving bonuses worth up $1.8 million if top executives meet certain liquidation goals.
And it sets the stage for the company to find a second life with new owners. Hostess said in court that it's in talks with 110 potential buyers for its brands.
The suitors include at least five national retailers, such as supermarkets, a financial adviser for the company said, according to the report. The process has been "so fast and furious" Hostess wasn't able to make its planned calls to potential buyers, said Joshua Scherer of Perella Weinberg Partners.
"Not only are these buyers serious, but they are expecting to spend substantial sums," he told AP.
In a hearing in the U.S. Bankruptcy Court in the Southern District of New York in White Plains, N.Y., company lawyers said the bonuses are needed to retain the 19 corporate officers and "high-level managers" during the wind-down process, which could take about a year.
Two of those executives would be eligible for additional rewards depending on how efficiently they carry out the liquidation. The compensation is in addition to regular pay.
The bonuses do not include pay for CEO Gregory Rayburn, who was brought on as a restructuring expert earlier this year. Rayburn is being paid $125,000 a month, AP reported.
In court Thursday, an attorney for Hostess noted that the company is no longer able to pay retiree benefits, which come to about $1.1 million a month. Hostess stopped contributing to its union pension plans more than a year ago.