Unions Killed the Twinkie

[nathanm]

Silver Point Capital and Monarch Alternative Capital now run Hostess.

It would be interesting to know how much they got out of Hostess in fees and interest since the 2009 bankruptcy. It strikes me as odd that a company with no way of paying existing debt and not a lot of fat to cut in the workforce would accept $30 million in DIP financing at 15% interest. Just wait, and you'll see the corporate officers who took the $1 pay cut get paid millions in the liquidation while stores that Hostess owes product to will get nothing.

Seems like they should have taken Bimbo offer back in 2007 or whenever that was. No, I take that back, it's all the unions' fault.

[Townsend]

Seems like they should have taken Bimbo offer back in 2007 or whenever that was. No, I take that back, it's all the unions' fault.

I think there were issues with Mexican companies giving the US workers jobs.

[Conan71]

So, if the VC firm hadn't been involved in the first place, then these workers might have lost their jobs a few years ago.  Instead, they enjoyed a few more years employment.

FWIW, looks like we will get stiffed in a $6000+ tab they owe us for some recent work at their Tulsa facility.  I believe we also wrote off about $2K a few years back according to our office manager.  For some reason no one thought to put them on COD after getting hosed the first time.

[bmuscotty]

So we're sure it's not a major crash of the twinky market?

Does anyone buy twinkies or strawberry quick anymore?

I haven't in years. Hostess products don't taste as good as they did 20 years ago imo. I buy Little Debbie snacks and starting to get into Tastykake stuff. Yummy.

[DolfanBob]

Man I wish I had a Higher Education, Three piece suit and no conscience. 

[Gaspar]

So, if the VC firm hadn't been involved in the first place, then these workers might have lost their jobs a few years ago.  Instead, they enjoyed a few more years employment.

FWIW, looks like we will get stiffed in a $6000+ tab they owe us for some recent work at their Tulsa facility.  I believe we also wrote off about $2K a few years back according to our office manager.  For some reason no one thought to put them on COD after getting hosed the first time.

The VCs also allowed their venders and retailers to enjoy a couple more years of profit from their products.  Children and 40 year old unemployed stoned guys living in mom's basement staring at faded Obama "HOPE" posters also enjoyed a couple more years of ho-hos.  Tulsa got a couple more years of tax revenue to support its failing schools, and the wheat farmers and chemists that work together to produce the glowing sludge that becomes Twinkie dough were afforded a few more loving moments.  All because some evil Vulture Capitalist was willing to put some faith and money in a horribly mismanaged company.

Dang it!  I told myself I wouldn't cry.   

[guido911]

TW is tweeting that the sign carriers are still there.

Still there. Bought some junk food from the store. The staff would not allow pictures to be taken inside the store for some bizarre reason. My check out lady was not a happy person.

[Townsend]

Still there. Bought some junk food from the store. The staff would not allow pictures to be taken inside the store for some bizarre reason. My check out lady was not a happy person.

I just listened to them being interviewed, hopeful of a purchase by a dreamy company who would offer them something better.  It was a little sad.

[Gaspar]

Perhaps the Union will buy it and run it?

[nathanm]

Perhaps the Union will buy it and run it?

They did buy part of it during the last bankruptcy by exchanging (pension) debt for equity.

[Conan71]

They did buy part of it during the last bankruptcy by exchanging (pension) debt for equity.

And now that equity will be sold for pennies on the dollar.

[Conan71]

Still there. Bought some junk food from the store.

They should stay good for at least 100 years.  I wonder if you could use Ding Dongs as barter material during the zombie apocalypse?

[guido911]

Man I wish I had a Higher Education, Three piece suit and no conscience. 

Here's higher education benefits for ya:

[nathanm]

And now that equity will be sold for pennies on the dollar.

Likely nothing at all now that it's a Chapter 7 case. The DIP lender gets first dibs, then (likely) the executives, then the secured creditors and well, they don't seem to think there's enough assets in the business to even get to the end of that list. I have little doubt that the PE funds have significant secured debt holdings (that they probably did buy for pennies on the dollar) over and above their equity stakes.

If your company doesn't get its $6000, you can be sure that equity holders aren't getting anything for their equity stake.

[Red Arrow]

I haven't in years. Hostess products don't taste as good as they did 20 years ago imo. I buy Little Debbie snacks and starting to get into Tastykake stuff. Yummy.

Tastykake has been in the Philadelphia, PA area for a long time.  I always liked the Butterscotch Krimpets.  I hope the 2011 "merger" didn't change them.

http://www.tastykake.com/aboutus/