Just when the Girl Scouts decided to unveil a new cookie; Twinkies maker, Hostess Brands Inc. is preparing to file for Chapter 11 bankruptcy protection as soon as this week, a move that would mark the second significant court restructuring for the Twinkies and Wonder Bread baker in the past several years.
The Wall Street Journal cites people familiar with the matter, saying the makers of Twinkies, Wonder Bread and those iconic chocolate Hostess cupcakes with the squiggle of white icing, are carrying more than $860 million in debt.
Rising prices for sugar, flour and other ingredients the company needs to bake up its various smushy offerings are partly to blame, as well as the high labor costs that come with employing around 19,000 people. Even $2.5 billion in sales hasn’t been enough to meet those rising costs.
They’re also in debt to the tune of about $50 million to vendors, which are now asking for Hostess to pay up because of the financial straits, one source told the WSJ. Since the company has filed for Chapter 11 before, in a restructuring move in 2004, those in the know are calling this newest filing a Chapter 22 proceeding.
Might as well stockpile those Twinkies just in case. They’ll last forever anyway, right?
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