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Hostess reorganization is a sweet success

On Behalf of | Jan 18, 2017 | Chapter 11 |

It was a dark day for many lovers of delicious snack cakes when Hostess filed for Chapter 11 bankruptcy last year. It was not only Doomsday preppers who rushed to stockpile the iconic desserts. The pain of many in Maryland was felt as people posted over social media their heartache at losing their favorite sweets. Meanwhile, those within the company began its reorganization.  

Soon after bankruptcy, the Hostess company was purchased by two private firms who sold a majority interest to a third company. The controlling company set to work recreating the beloved products. Those who grieved for Twinkies, Ho Hos and other snacks reminiscent of their childhood may have been delighted to hear that, only a year after reports of its demise, Hostess began trading again as a public company this past November.

Since then, shares leaped 25 percent. Some economic pundits credit the rapid rebirth of Hostess to the innovative direction the owners have taken. For example, Hostess Brand now sells frozen Twinkies in a deep-fried version popular at county fairs. Sno Balls and CupCakes, too, will soon be available as ice cream treats. The company also boasts a financial efficiency that has reduced expenses and raised profits.

The success story of Hostess Brands may be an inspiration to other companies, large and small, who are finding it increasingly difficult to pay their debts. Chapter 11 lets a business maintain its operations while protected from creditors. This allows the business time for reorganization of its assets and liabilities in an effort to remain solvent. Many business owners in Maryland find relief in discussing their options with an attorney who is experienced in bankruptcy involving businesses.

Source: CNN, “Hostess is hotter than a deep fried Twinkie”, Paul R. La Monica, Jan. 12, 2017

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