By Tom Hals
Nov 29 Hostess Brands Inc, the bankrupt maker of
Twinkies snack cakes, received court permission to wind down its
82-year-old business on Thursday but revealed "furious" interest
in its iconic brands from potential buyers.
New York Bankruptcy Court Judge Robert Drain approved the
final orders that cleared the way for the company to begin
selling its assets, everything from brands such as Ding Dongs
and Twinkies to baking equipment and real estate.
"It's undisputed they will be worth more moving down this
path," Drain said of the wind-down plan.
Around 110 potential bidders have contacted the company
about bidding for at least part of its business, and 70 had
enough interest to sign confidentiality agreements, Hostess'
banker told the hearing in White Plains, New York.
Joshua Scherer of Perella Weinberg, who was hired by Hostess
to sell its assets, said that six potential bidders have hired
large investment banks to help them.
"It's very significant because it indicates to me that not
only are these buyers serious, but they are expecting to spend
substantial sums," said Scherer. He said the liquidation could
raise $1 billion.
Scherer described the level of incoming calls from potential
bidders as "fast and furious." Interested parties include large
national retailers and overseas buyers that wanted to bring
Hostess brands to India, he said.
By early January, the company expects to have initial bids
for its various brands, which will then be put to auction.
Money raised from the sale of assets will help Hostess repay
its creditors. It has about $900 million of secured debt and
faces up to about $150 million of administrative claims.
Scherer said last week that Hostess could be worth $2.3
billion to $2.4 billion in a normal bankruptcy, an amount equal
to its annual revenue.
Hostess abandoned its initial plan to reorganize as an
ongoing business and decided to liquidate on Nov. 16, saying it
was losing about $1 million per day after the Bakery,
Confectionery, Tobacco and Grain Millers Union, representing
close to one-third of its workers, went on strike a week
Drain expressed frustration with the bakers' union earlier
this month for striking. The union walked out after Drain
authorized Hostess to impose pay and benefit cuts, which the
International Brotherhood of Teamsters, Hostess' largest union,
His frustration burst into the open again on Thursday and he
briefly shouted at the bakers' attorney, Ancela Nastasi, after
he questioned her approach in questioning witnesses.
"I have to wonder, again ... what your clients' basis is for
whatever they are doing here. I just don't get it," he said.
The case is In re: Hostess Brands Inc et al, U.S. Bankruptcy
Court, Southern District of New York, No. 12-22052.