Hostess to Move Ahead with Liquidation Plans After Mediation with Union Fails

Union leadership had little hope for last-ditch mediation session

By Sam Schulz
|  Wednesday, Nov 21, 2012  |  Updated 5:43 AM CDT
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Customers have cleared store shelves of Hostess products such as Twinkies, and store operators say they aren't scheduled to receive any more shipments.

Omar Villafranca, NBC 5 News

Customers have cleared store shelves of Hostess products such as Twinkies, and store operators say they aren't scheduled to receive any more shipments.

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Okla. Man Stockpiles Hostess Snacks

A Stillwater, Okla., man who collects Hostess snacks was on a Twinkie mission after hearing news of the company's shutdown.
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The Twinkie has lost its lifeline.

Hostess' stab at mediation with its bakers union has failed, the company said Tuesday. The Wall Street Journal reported that the company was planning to move ahead with plans to shut down all its plants and liquidate its assets.

That plan, which the company had announced days earlier in bankruptcy court, comes on the heels of a strike by the Bakery, Confectionary, Tobacco and Grain Millers Union and will leave more than 18,000 people out of work, a spokesman said Tuesday, according to the Journal.

A bankruptcy judge had asked the parties to head to mediation on Monday, but the president of the union had not been hopeful about its prospects and didn't attend the session. "I'm not too optimistic," he told the Journal on Tuesday.

Hostess will be back in the U.S. Bankruptcy Court for the Southern District of New York on Wednesday to pursue its liquidation plan, after its earlier efforts to restructure while under Chapter 11 protection.

It declined to comment further Tuesday night, saying additional news would have to wait until its return to bankruptcy court at 11 a.m. ET on Wednesday.

In the meantime, Hostess snacks of all shapes and sizes have sold out of North Texas stores.

When people found out that Hostess might be going out of business, customers snapped up Twinkies, Donettes and other baked goods. Boxes of Twinkies even showed up on auction site eBay for hundreds of dollars.

"I think it's very, very sad -- a tragedy," Corrie Gould said. "We're really oging to miss the Hostess brand, for sure."

"I'll have to see what other brands are out there," Ty Gould said. "They're not as good as Hostess, I can tell you that."

That kind of brand loyalty is very valuable, and business insiders say the company could sell off certain brands to buyer.

But a Stillwater, Okla., man who is tracking down every Hostess treat he can says it may not be the same.

"The name will live on, but they won't be the same," Jefferson Bryant said. "They'll never be the same. You can't ship from Mexico and expect them to be fresh."

NBC 5's Omar Villafranca contributed to this report.

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