Marijuana enthusiasts from Washington and Colorado will save the company with a quickly organized Kickstarter.I don't know about Colorado, but we've got plenty of vastly superior alternatives:
It exited bankruptcy in 2009 in a deal financed by Ripplewood Holdings, which received a controlling stake in the company for a $130 million capital commitment. General Electric's (GE) GE Capital division, Monarch Alternative Capital and Silver Point Capital also provided hundreds of millions in rescue financing, the Post reports.Ripplewood was apparently larded it up with consultants:
Resist the temptation to mock the consulting-firm-speak (“driving the planned priorities?”), and ask yourself what’s missing. Don’t C.F.O.’s normally work closely with the treasury departments, too?And so on.
Turns out that Hostess has no treasury department. It apparently doesn’t have anyone who can perform treasury functions at all.
The company has asked the bankruptcy court for permission to hire FTI Consulting to do the work. Apparently Hostess does not have much of a finance department either, since FTI is also providing employees for that department.
If approved, FTI will provide three people to staff Hostess’ treasury department. The interim treasurer gets monthly fees that work out to an annual salary of $780,000. His two deputies get $660,000 per year, each.
The finance department group gets paid hourly rates that top out at $895 per hour. You might think that would supplant the need for a financial adviser in the case, but Hostess is asking to retain one of those, too.
And then there is the $1.25 million completion fee that FTI will get at the end of the case.
When it filed for bankruptcy this year it listed unsustainable debt as a primary reason — more than $800 million in debt to financial players and a larger amount owed to its employees [pension obligations that have already been converted to equity]. The debt to financial players is secured by assets, the debt to workers is secured by nothing at all and not likely to ever be paid back.posted by notyou at 5:42 PM on November 15, 2012 [19 favorites]
Instead of improving their bargaining position with the new owners, why wouldn't this simply encourage the new owners to say "Oh, those guys? The ones that drove the old owners out of business. Yeah, those guys. Fuck those guys. Seriously."
"Much more modest requests" my ass. There were about 18,000 Hostess employees. Every $1,000 spent per employee is $18 million for the company. Probably closer to $19-20 million after taxes are counted. That $3 million we were talking about? $166 per employee. The Teamsters just agreed to an 8% pay cut, which would probably have saved the company something like $50 million. Tens of millions, certainly.
However, the Saputo lineup doesn’t currently include Twinkies.posted by asnider at 10:58 AM on November 16, 2012
These workers deserve universal health care, a good pension from Social Security, and dare I say it, even a Universal Basic Income to support them while they try to find other jobs. The fact that we depend on a privatized welfare state where all these things are tied to jobs is bad for workers and bad for the country.posted by the man of twists and turns at 7:02 AM on November 17, 2012 [2 favorites]
It feeds into the problem Ashwin Parameswaran discusses in this post, a quixotic search for “a stable system where labour and capital are both protected from the dangers of failure”, one which “inevitably breeds a fragile and disadvantaged working class” that is fragmented into groups of protected insiders looking to protect their status, rather than act in solidarity as a class. I can’t recommend that post enough if you, like a lot of people I interact with, have any affinity for the project of “somehow recreat[ing] the golden age of the 50s and the 60s i.e. stability for all.”
If you're okay throwing around orders of magnitude like that--the employees were presumably demanding something which would cost the company twenty-plus times more than the executive compensation we're talking about--then it's probably a good thing that you aren't running any businesses.
By constantly trying to defend and extend its old business, leadership at Hostess killed the company. But not realizing changing trends in foods made their products irrelevant – if not obsolete – and not changing Hostess leaders allowed margins to disintegrate. Rather than developing new products which would be more marketable, priced for higher margin and provide growth that covered all costs Hostess leadership kept trying to financial engineer a solution to make their horse and buggy competitive with automobiles.FOX blames the Union.
And when they failed, management decided to scapegoat someone else.
Or going back to my intended-as-rhetorical question - Do you think the execs will suffer here, regardless of who the media blames? Hell no! They'll get their golden parachutes no matter what happens. The one group that both had options and a lot to lose here has chosen to throw those options away to make a point.
...analysts' reports that Thomasville, Ga.-based Flowers Foods Inc. and private equity food investment firm Metropoulos & Co. are likely suitors. Metropoulos owns Pabst Brewing Co., while Flowers Foods makes Nature's Own bread, Tastykake treats and other baked goods.If Tastykake's owners think there's a future there, there IS a future there. But the owners of Pabst? PBR and Twinkies? Do they (or could they) really have 'hipster cred'?
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posted by chavenet at 4:19 PM on November 15, 2012 [10 favorites]