Despite fear-mongering headlines , the Twinkie is not dead yet. Consumed by Americans at a rate of 500 million a year, the creme-filled sponge cake


The Twinkie Defense: Hostess Given More Time in Bankruptcy Fight with Seattle Teamster Fund

Despite fear-mongering headlines, the Twinkie is not dead yet. Consumed by Americans at a rate of 500 million a year, the creme-filled sponge cake created in 1930 has been given a reprieve by a New York bankruptcy judge, allowing its maker, Hostess Brands Inc., more time to reorganize during its financial and labor battle with creditors, including the Western Conference of Teamsters in Seattle.

The producer also of Ding Dongs, Ho Hos and Wonder Bread, Texas-based Hostess filed for Chapter 11 bankruptcy protection earlier this year - just months after it doled out extraordinary pay hikes to its Houston executives. The salary of then-CEO Brian Driscoll, for one, jumped 300 percent, from $750,000 to $2.55 million, Dow Jones recently reported.

That news led to demonstrations just last Friday by Seattle Teamsters and other unions representing Hostess' U.S.bakery workers. Teamsters Local 117, accusing Hostess of "corporate looting," passed out handbills at the chain's bakery on Dexter Avenue, noting that rank-and-file unionized workers haven't received a significant pay increase for years. Hostess, the Teamsters said, stopped making payments on workers' pension plan last August, a month after it increased the salaries of eleven top executives by 80 percent.

Hostess has now announced it will reverse the pay hikes.

According to The Deal, Hostess had a net loss of $138 million in 2010 and a $341 million net loss last year. The corporation blamed high legacy costs of pensions and medical benefits, along with inflexible labor work rules.

The Western Conference of Teamsters Pension Plan of Seattle is owed $7 million by Hostess and is among the company's largest unsecured creditors listed in bankruptcy court records. The biggest creditor is Bakery & Confectionery Union & Industry International Pension Fund of Kensington, Md, owed $944 million.

At a court hearing this week, Hostess sought court approval to shed collective bargaining agreements with the Teamsters and bakers' unions - which the unions said would create instant chaos and a nationwide strike. That led to concerns that the Twinkie and its sibling treats would disappear, perhaps forever, from food shelves.

But a company spokesperson says the court has granted a 90-day extension to Hostess to file a new reorganization plan and solicit acceptances to it, The Deal reports. Hostess also said it was still trying to negotiate new union agreements and needed more time to complete a search for an investor to finance its emergence from Chapter 11.

That more-positive news comes just two weeks after National Twinkie Day, in case you missed it. In a news release, Hostess recalled that James Dewar invented the Twinkie in 1930, calling it "the best darn-tootin' idea I ever had." The company also claimed to have improved on its iconic treat with the limited-edition release of Chocolate Creme Twinkies last year.

The company deemed the re-flavoring a success, while purists called it simply "a sad day."

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