Sugar aficionados were dealt a not-so sweet blow on Wednesday as the company behind Twinkies and other plastic-wrapped confections filed for bankruptcy protection.
Hostess Brands Inc. said it filed for Chapter 11 protection amid worsening problems involving benefits, pensions and a harsh economic downturn.
"We remain hopeful that we can reach an agreement that will allow us to amend our labor contracts so that we can emerge from Chapter 11 as a highly competitive company," Hostess President Brian Driscoll said in a statement.
This isn't the first time the Texas-based company has sought bankruptcy protection. The previous reincarnation of Hostess emerged from insolvency proceedings in 2009.
In a released statement, Hostess referred to its previous attempts for financial change as insufficient.
Despite its troubles, Canadians need not worry about Hostess products disappearing anytime soon.
Saputo holds the rights to the Hostess brand in Canada and operates it as a separate entity.
"It's totally separate. We have nothing to do with the Hostess brand in the U.S." Saputo spokesperson Sandy Vassiadis told CTVNews.ca in a telephone interview.
Those curious about the future of Wonder Bread or other Hostess-made products may also be relieved to know that the company plans to continue regular operations during a "comprehensive financial and operation restructuring."
Hostess says the business-as-usual approach will be made possible by $75 million worth of "debtor-in-possession" financing from a group of lenders, led by investment firm Silver Point Capital.
"This Company has tremendous potential if we can remove the barriers to success," said Driscoll.
The 81-year-old company estimates that it has about 19,000 employees and operates 565 distribution centres throughout the United States.
Expert snackers may also be familiar with the company's other treats such as Ho Hos, Ding Dongs, Sno Balls and its bestselling Hostess Snack Cakes.
