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At a hearing yesterday in U.S. Bankruptcy Court for the Southern District of New York, Judge Robert Drain granted final approval to Hostess' liquidation plan. In addition, he approved the company's request to pay its top executives as much as $1.8 million as part of that plan, according to Bloomberg.
The sale process should "move quickly," Drain added.
The judge gave Hostess the go-ahead to begin shutting down operations right before Thanksgiving after talks between the company and the Bakery, Confectionary, Tobacco and Grain Millers Union broke down. The baker's union went on strike Nov. 9, which led Hostess to move forward with bankruptcy plans on Nov. 16. Hostess had asked its employees to agree to an 8-percent pay cut, a 20-percent increase in health care costs, closure of 10 to 12 plants and changes to pension and workday provisions, as CSNews Online previously reported.
To date, more than 100 companies have reportedly expressed interest in acquiring Hostess, financial advisor Joshua Scherer of Perella Weinberg Partners LP told the judge, according to Bloomberg. The potential buyers include large companies with recognizable names, Scherer said, and some have hired investment bankers and are reviewing company data.
Last week, Scherer estimated that Hostess' asset sales may generate about $1 billion. The company was worth $450 million in 2011, David Rush, the company's interim treasurer, told the court yesterday. However, according to the news report, that estimate should be re-evaluated because of potential buyers' interest in the company's brands and intellectual property, Rush said.
"We are very pleased with today's outcome because it provides certainty to our employees and potential bidders that we are moving forward with the sale of our assets," Tom Becker, a Hostess spokesman, said in an e-mailed statement to Bloomberg.