Many members of my generation were distressed in January of 2011 when Hostess Brands Inc; the creator of such childhood favorites as Twinkies, Ding Dongs and Wonder Bread filed a chapter 11 bankruptcy petition in the U.S. Bankruptcy Court for the Southern District of New York. Hostess planned to emerge from chapter 11 bankruptcy in November but was unsuccessful as a result of its failure to reach an agreement with its bakers union. It thereafter made the decision to convert its bankruptcy to a Chapter 7 liquidation.
The purpose of chapter 11 is to allow a business entity or an individual with significant debt to gain temporary protection from creditors while attempting to restructure his/its debt. The process is similar to a chapter 13 bankruptcy wherein an individual can propose a plan to stop a foreclosure, repossession or wage garnishment. Because Hostess was unable to restructure its debt, it converted (switched over) to a Chapter 7 straight bankruptcy. At that time, it closed its doors and a trustee was appointed to liquidate its assets. Twinkie lovers throughout the world have suffered withdrawals since that time!
On March 19, 2013, it was announced that the Bankruptcy Judge overseeing the Hostess bankruptcy proceedings has approved the sale of popular brands such as Twinkies, Ho Hos, Ding Dongs and Donnettes to other companies which are expected to have the brands back on grocery store shelves by late summer. So in the end, Twinkie lovers everywhere should be thankful to the bankruptcy process for saving some of our favorite snacks.
Big Companies, small companies and individuals of every socio-economic class at times have financial problems that can be overwhelming. If you find yourself in this situation, you owe it to yourself to seek the advice of a trusted professional. Please know that we have experienced attorneys in all of our offices who will provide a face to face free consultation.