Hostess asks Bankruptcy Judge to Cut Union Obligations

Hostess Brands Inc., makers of the infamous Twinkie has asked a bankruptcy judge to cut some its union obligations stating it is the only way for the company to emerge from bankruptcy.

Union bosses issued a statement saying that Hostess is trying to “bully” its way out of obligations to its employees, according to the Washington Post.

Hostess filed for bankruptcy protection earlier this month amid slipping sales and competition from other bakers like Entenmann’s. The company just emerged from a previous restructuring plan from three years ago.

Hostess says that their financial problems are also due in part to their obligations to employees and retirees. They stated that during their last bankruptcy proceeding they were not given sufficient relief from employee obligations.

Union bosses assert that Hostess employees already sacrificed a great deal during the previous bankruptcy. Unions make up 75 percent of Hostess’s 19,000 employees. The Teamsters added they are negotiating with Hostess over employee benefits. A court date is scheduled for Monday.

Bankruptcy attorneys help companies figure out ways to become financially solvent again. Not only do they need to reduce their obligations to creditors but to employees also if they want to survive.

Any company that needs to relieve their overwhelming debt can consult with a bankruptcy lawyer to determine which structure will work form them. Bankruptcy attorneys have the knowledge and the expertise to get a company out of the red.