Hostess, striking union enter mediation

Dallas, TX, United States (4E) – Hostess Brands Inc., baker of brands like Twinkies, Ho Hos and Wonder Bread, has agreed to get into mediation with its striking union Monday.

Bankruptcy Judge Robert Drain said at a hearing in White Plains, New York that he seriously questions the logic of the decision to strike and urged both parties to enter mediation, citing the possibility of massive job losses.

Drain is set to preside over a mediation session on Tuesday where if not successful, will lead Hostess to return to court on the following morning to push through with the liquidation of its assets.

For the time being, the Irving, Texas-based company will not go out of business yet as it attempts to resolve its difference with its second largest union.

Hostess earlier decided it was going to bankruptcy court to sell off its assets saying that the strike crippled its operations. On Friday, Hostess announced that it could no longer afford to go through Chapter 11 bankruptcy and instead has asked the court’s permission to go out of business and sell its assets. The company struggles with rising labor costs, management problems, high debt and changing consumer tastes.

Both Hostess and the union have not had any discussions since August, according to a lawyer of the company.

Company representatives are also seeking permission from Drain to allow them to pay bonuses to top-level managers. The closure means most of the company’s 18,500 workers will be out of work.

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