Categories
Hit-Or-Miss

Goodbye Twinkies, Wonder Bread and Ding Dongs — Hostess Closing for Good

As of 7:00AM this dreary Friday morning, Hostess Brands is closed. Done. Kaput.

The same people that have brought you Ding Dongs, Twinkies and Wonder Bread for years has just announced, via their hostessbrands.com website, that the most recent Bakers Union strike has crippled their operations and forced the company to sell off all their assets.

The news of Hostess’ closing doesn’t come as a shock, as they had already filed for Chapter 11 bankruptcy back in January of this year. At the time, the Texas-based company had carried more than $860 million in debt and had been facing steadily increasing labor and raw goods costs, compounded by the declining sale of Twinkies and Ding Dongs in general.

11 months ago, we asked the question, “will Twinkies be gone forever?

11 months later, we get our answer. Here’s the press release as of 7:00 AM:

Hostess Brands is Closed.

We are sorry to announce that Hostess Brands, Inc. has been forced by a Bakers Union strike to shut down all operations and sell all company assets. For more information, go to hostessbrands.info. Thank you for all of your loyalty and support over the years.

 

HOSTESS BRANDS TO WIND DOWN COMPANY AFTER BCTGM UNION STRIKE CRIPPLES OPERATIONS

Friday, November 16, 2012 at 7:00AM

Irving, TX – November 16, 2012 – Hostess Brands Inc. today announced that it is winding down operations and has filed a motion with the U.S. Bankruptcy Court seeking permission to close its business and sell its assets, including its iconic brands and facilities. Bakery operations have been suspended at all plants. Delivery of products will continue and Hostess Brands retail stores will remain open for several days in order to sell already-baked products.

The Board of Directors authorized the wind down of Hostess Brands to preserve and maximize the value of the estate after one of the Company’s largest unions, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), initiated a nationwide strike that crippled the Company’s ability to produce and deliver products at multiple facilities.

On Nov. 12, Hostess Brands permanently closed three plants as a result of the work stoppage. On Nov. 14, the Company announced it would be forced to liquidate if sufficient employees did not return to work to restore normal operations by 5 p.m., EST p.m., Nov. 15. The Company determined on the night of Nov. 15 that an insufficient number of employees had returned to work to enable the restoration of normal operations.

The BCTGM in September rejected a last, best and final offer from Hostess Brands designed to lower costs so that the Company could attract new financing and emerge from Chapter 11. Hostess Brands then received Court authority on Oct. 3 to unilaterally impose changes to the BCTGM’s collective bargaining agreements.

Hostess Brands is unprofitable under its current cost structure, much of which is determined by union wages and pension costs. The offer to the BCTGM included wage, benefit and work rule concessions but also gave Hostess Brands’ 12 unions a 25 percent ownership stake in the company, representation on its Board of Directors and $100 million in reorganized Hostess Brands’ debt.

“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” said Gregory F. Rayburn, chief executive officer. “Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders.”

In addition to dozens of baking and distribution facilities around the country, Hostess Brands will sell its popular brands, including Hostess®, Drakes® and Dolly Madison®, which make iconic cake products such as Twinkies®, CupCakes, Ding Dongs®, Ho Ho’s®, Sno Balls® and Donettes®. Bread brands to be sold include Wonder®, Nature’s Pride ®, Merita®, Home Pride®, Butternut®, and Beefsteak®, among others.

The wind down means the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States.

The Company said its debtor-in-possession lenders have agreed to allow the Company to continue to have access to the $75 million financing facility put in place at the start of the bankruptcy cases to fund the sale and wind down process, subject to U.S. Bankruptcy Court approval.

The Company’s motion asks the Court for authority to continue to pay employees whose services are required during the wind-down period.

For employees whose jobs will be eliminated, additional information can be found athostessbrands.info . The website also contains information for customers and vendors. Most employees who lose their jobs should be eligible for government-provided unemployment benefits.

Categories
Fast Food

Quiznos Facing Possible Bankruptcy Into 2012

“Say it isn’t so” — say the last couple straggling Quiznos customers who don’t know that Subway will also toast their subs.

OK, it’s not that bad, yet. But it seems that Quiznos has never really bounced back from the “terrible economy” and the discounted prices of some of its biggest competitors (Subway’s $5 Foot Longs). Coupled with a generally higher ticket, as well as a model based around toasting subs, of which Subway has implemented a response with its own toasting ovens, Quiznos hasn’t had anything significant in recent years to showcase any competitive response to its industry.

Quiznos said it will file for bankruptcy protection if it fails “to reach restructuyring deals with all of its creditors and cannot receive significant concessions from former executives and certainlandlords and former area developers.” [Associated Press]

With roughly 3,500 stores interntationally, Quiznos has closed about 1,500 stores in recent years. Along with that, Quiznos warns that sales over the summer will come in below projections, reports The Wall Street Journal.

A majority of Quiznos’ creditors have agreed to a plan by the restaurant chain to restructure or pay off some $875 million in debt, but a filing for Chapter 11 bankruptcy protection still remains a real possibility. [AP]

Categories
Restaurants

Sbarro Exits Bankruptcy!

The Sbarro pizza chain filed for Chapter 11 bankruptcy earlier this year in April due to the high cost of ingridents and diminishing sales prices. According to NRN, as of today they are no longer in bankruptcy. The chain has won court approval for their bankruptcy plan, and is now on the road to rebuilding.

Our reorganization plan eliminates more than 70 percent of our debt, and provides access to $35 million in fresh capital from our new ownership group,” said Nicholas McGrane, Sbarro’s interim president to NRNThe company was bought by private equity firm MidOcean Partners in 2007.

Though this is very good news in the world of pizza, Sbarro did take some damage losing 25 company owned locations since April.

via: Huffington Post

Categories
Sweets

Dippin’ Dots Files For Bankruptcy

The “ice cream of the future,” aka Dippin’ Dots, is not feelin’ too futuristic today. The company filed for Chapter 11 bankruptcy in a U.S. Bankruptcy Court in Paducah, Ky after struggling for some time to come to terms with its $20.2 million in listed assets and debt of $12 million (according to its latest filing).

A reorganization plan is being drawn up for its finances and operations, which should be relatively good news for fans of the product. The novelty ice cream ice cream that is basically little beads of ice cream and is popular with theme park visitors and other event-goers should hopefully make it through the reorganization and maintain its distribution.

Categories
Restaurants

Parent Company of El Torito, Chevys and Acapulco Files for Bankruptcy

Real Mex Restaurants, Inc and all of its subsidiaries have announced that it will be filing for bankruptcy.  The corporation has announced that, under Chapter 11, they will go through a restructuring and reorganization of their properties.

Upon court approval, Real Mex will be receiving a commitment from General Electric Capital Corporation in the form of $49 million in debtor in possession (DIP).

The restaurants under Real Mex (El Torito, Chevys, Acapulco…) will not be affected by the restructuring. The process will be expected to finish within the first quarter of 2012.

(via: Restaurant News)

Categories
Hit-Or-Miss

Black Angus Steakhouse Operator's Chapter 11

It wasn’t too long ago that we heard Black Angus was ridding of some of their lunch options in order to save operating costs. As of January 15th though, ARG Enterprises Inc., the operator of 69 Black Angus locations in seven western U.S. states sought bankruptcy. Black Angus was founded in Seattle back in 1964 and employs over 3,600 people. The future of Black Angus is unsure, though some undisclosed parties have indicated an interest in ARG’s remaining assets. We will bring more news regarding Black Angus Steakhouse as it becomes available to us. (Thx Bloomberg)