Hostess Brands Inc. will start selling off the rights to Twinkies, Ding Dongs and other baked brands after a federal bankruptcy judge on Wednesday approved its plan for an “orderly wind-down.”
The company will also start shrinking its employee head count to 3,200 workers from 18,500, the 82-year-old pastry maker said.
Judge Robert Drain of the U.S. Bankruptcy Court in the Southern District of New York gave Hostess the go-ahead to start fielding bidders for its assets, the company said.
Drain’s approval came after the failure Tuesday of several hours of “eleventh-hour mediation” between Hostess and the Bakery, Confectionery, Tobacco and Grain Millers Union.
Hostess first moved to shut down its operations Friday, blaming the union for a strike that “crippled its operations at a time when the company lacked the financial resources to survive a significant labor action.”
Workers who walked off their jobs accused Hostess of awarding pay increases to executives while pillaging employee benefits and wages.
On Wednesday, the day before Thanksgiving, Hostess Chief Executive Gregory Rayburn testified that layoffs of 15,000 employees would begin immediately, with head counts shrinking 94% within 16 weeks. Some 3,200 workers would remain to see the shuttering through.