4 ms·

Blaming this bankruptcy on strikes is so utterly, transparently horseshit. I hope pundits call them out on this.

cobrausn 14y ago
If you have details, please share.
tptacek 14y ago
Nobody is blaming the bankruptcy on strikes; they were in bankruptcy long before this strike. What's happened as a result of the strike is that their Chapter 11 (restructuring) has changed to Chapter 7 (liquidation), because they are not capable of generating revenue if they can't reliably produce products, and their operational overhead is huge.
- binxbolling 14y ago
  I think "nobody" is a bit inaccurate: Seattle PI (AP): "The Irving, Texas, company said a nationwide strike crippled its ability to make and deliver its products, which also include Ding Dongs, Ho Ho's and Home Pride bread." http://www.seattlepi.com/news/texas/article/Twinkie-maker-Hostess-reaches-the-end-of-the-line-4043395.php#ixzz2CPcWHJoE http://www.seattlepi.com/news/texas/article/Twinkie-maker-Ho... MSN (Reuters): "Nearly 18,500 workers will lose their jobs as the company succumbs to the crippling effects of a nationwide union strike." http://money.msn.com/top-stocks/post.aspx?post=6d7b095e-e558-4dc4-83e9-1859d177e676&ocid=ansmony11 http://money.msn.com/top-stocks/post.aspx?post=6d7b095e-e558... Read other articles this morning (sorry I don't have them on-hand) that are also pinning this on strikes, mostly because AFAIK Hostess is trying to pin it on the strikes.
  - tptacek 14y ago
    The strike is crippling them. But the strikes themselves aren't the systemic cause of Hostess Brands bankruptcy, which started long before this round of strikes. Demand for Hostess offerings is down, and Hostess' overhead is atypically high for its industry.
    - binxbolling 14y ago
      Right, so we agree then.
- asmithmd1 14y ago
  In a liquidation the common stock holders get nothing until all claims are paid. Who are the biggest creditors to Hostess? I will bet you dollars to donettes that Ripplewood holdings is somehow a creditor and not a stockholder. The money from the sale of the valuable brand names will surely flow to them; someone will start making Wonder bread and Twinkees free of legacy union liabilities; and the share of national income that flows to working people will notch down again.
  - tptacek 14y ago
    The article Zero Hedge quotes from states repeatedly that Ripplewood bought equity first, and then more equity and some debt.

If you have details, please share.

Nobody is blaming the bankruptcy on strikes; they were in bankruptcy long before this strike. What's happened as a result of the strike is that their Chapter 11 (restructuring) has changed to Chapter 7 (liquidation), because they are not capable of generating revenue if they can't reliably produce products, and their operational overhead is huge.

binxbolling 14y ago
I think "nobody" is a bit inaccurate: Seattle PI (AP): "The Irving, Texas, company said a nationwide strike crippled its ability to make and deliver its products, which also include Ding Dongs, Ho Ho's and Home Pride bread." http://www.seattlepi.com/news/texas/article/Twinkie-maker-Hostess-reaches-the-end-of-the-line-4043395.php#ixzz2CPcWHJoE http://www.seattlepi.com/news/texas/article/Twinkie-maker-Ho... MSN (Reuters): "Nearly 18,500 workers will lose their jobs as the company succumbs to the crippling effects of a nationwide union strike." http://money.msn.com/top-stocks/post.aspx?post=6d7b095e-e558-4dc4-83e9-1859d177e676&ocid=ansmony11 http://money.msn.com/top-stocks/post.aspx?post=6d7b095e-e558... Read other articles this morning (sorry I don't have them on-hand) that are also pinning this on strikes, mostly because AFAIK Hostess is trying to pin it on the strikes.
- tptacek 14y ago
  The strike is crippling them. But the strikes themselves aren't the systemic cause of Hostess Brands bankruptcy, which started long before this round of strikes. Demand for Hostess offerings is down, and Hostess' overhead is atypically high for its industry.
  - binxbolling 14y ago
    Right, so we agree then.
asmithmd1 14y ago
In a liquidation the common stock holders get nothing until all claims are paid. Who are the biggest creditors to Hostess? I will bet you dollars to donettes that Ripplewood holdings is somehow a creditor and not a stockholder. The money from the sale of the valuable brand names will surely flow to them; someone will start making Wonder bread and Twinkees free of legacy union liabilities; and the share of national income that flows to working people will notch down again.
- tptacek 14y ago
  The article Zero Hedge quotes from states repeatedly that Ripplewood bought equity first, and then more equity and some debt.