A last-minute reprieve for Twinkies?

  • Andy Wagar loads Twinkies, Ho-Hos and Cup Cakes into a van outside the Wonder Bakery Thrift Shop in Bellingham, Wash., on Nov. 16, 2012, after Hostess Brands Inc. said it would shutter is operations after years of struggling with management turmoil, rising labor costs and the ever-changing tastes of Americans. (Assocated Press/The Bellingham Herald)Andy Wagar loads Twinkies, Ho-Hos and Cup Cakes into a van outside the Wonder Bakery Thrift Shop in Bellingham, Wash., on Nov. 16, 2012, after Hostess Brands Inc. said it would shutter is operations after years of struggling with management turmoil, rising labor costs and the ever-changing tastes of Americans. (Assocated Press/The Bellingham Herald)
  • A cashier rings up boxes of Hostess Twinkies and Cup Cakes at the Hostess Brands' bakery in Denver on Nov. 16, 2012. (Associated Press)A cashier rings up boxes of Hostess Twinkies and Cup Cakes at the Hostess Brands' bakery in Denver on Nov. 16, 2012. (Associated Press)
  • **FILE** Twinkies baked goods are displayed for sale Nov. 16, 2012, at the Hostess Brands' bakery in Denver. (Associated Press)**FILE** Twinkies baked goods are displayed for sale Nov. 16, 2012, at the Hostess Brands' bakery in Denver. (Associated Press)
  • **FILE** This 2003 photo originally released by Interstate Bakeries Corporation shows Twinkies cream-filled snack cakes. Twinkies first came onto the scene in 1930 and contained real fruit until rationing during World War II led to the vanilla cream Twinkie. (Associated Press/Interstate Bakeries Corporation via PRNewsFoto)**FILE** This 2003 photo originally released by Interstate Bakeries Corporation shows Twinkies cream-filled snack cakes. Twinkies first came onto the scene in 1930 and contained real fruit until rationing during World War II led to the vanilla cream Twinkie. (Associated Press/Interstate Bakeries Corporation via PRNewsFoto)
  • **FILE** A fried Twinkie is shown at ROXX Tavern in Atlanta on Nov. 16, 2012. (Associated Press)**FILE** A fried Twinkie is shown at ROXX Tavern in Atlanta on Nov. 16, 2012. (Associated Press)
  • People wait in line to get into the Hostess Thrift Shop in Ogden, Utah, on Nov. 16, 2012. (Associated Press/Standard-Examiner)People wait in line to get into the Hostess Thrift Shop in Ogden, Utah, on Nov. 16, 2012. (Associated Press/Standard-Examiner)
  • Customers shop at the Sweetheart Outlet store in Casper, Wyo. on Nov. 16, 2012. The store, which was to close three days later, is a casualty of the Hostess liquidation. A sign on the door apologizes for the low stock, blaming it on the strike at the Hostess bakeries. (Associated Press/The Casper Star-Tribune)Customers shop at the Sweetheart Outlet store in Casper, Wyo. on Nov. 16, 2012. The store, which was to close three days later, is a casualty of the Hostess liquidation. A sign on the door apologizes for the low stock, blaming it on the strike at the Hostess bakeries. (Associated Press/The Casper Star-Tribune)
  • Michelle Craft, of Thornton, Colo., loads boxes of Twinkies and Zingers into her car after buying about $100 worth of the baked goods at the Hostess Brands' bakery in Denver on Nov. 16, 2012. Announcements that Hostess Brands will be going out of business prompted a buyers' run on the bakery. (Associated Press)Michelle Craft, of Thornton, Colo., loads boxes of Twinkies and Zingers into her car after buying about $100 worth of the baked goods at the Hostess Brands' bakery in Denver on Nov. 16, 2012. Announcements that Hostess Brands will be going out of business prompted a buyers' run on the bakery. (Associated Press)
  • All the Hostess cakes and snacks are sold out at the Wonder Bread Bakery Outlet in Waterloo, Iowa, on Nov. 16, 2012. (Associated Press/The Waterloo Courier)All the Hostess cakes and snacks are sold out at the Wonder Bread Bakery Outlet in Waterloo, Iowa, on Nov. 16, 2012. (Associated Press/The Waterloo Courier)

The maker of Twinkies, Ding Dongs, Ho Hos and Wonder Bread agreed Monday to last-minute mediation talks in the labor dispute that has driven the company to the brink of shutting its doors.

Hostess, the troubled Irving, Texas-based snack maker, which filed a motion to begin liquidating assets on Thursday, will sit down Tuesday for one day of talks with union leaders and the bankruptcy judge overseeing the case.

The company has been crippled by a strike that began Nov. 9 by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which represents about 30 percent of Hostess workers.

With an estimated 18,000 jobs hanging in the balance, U.S. Bankruptcy Court Judge Robert Drain postponed the liquidation hearing until Wednesday in hopes the company and the unions could reach an agreement.

“My desire to do this is prompted primarily by … my belief that there is a possibility to resolve this matter notwithstanding the losses that the debtors have incurred over the last week or so and the difficulty of reorganizing this company in the first place,” said Judge Drain, who is presiding over the case in White Plains, N.Y.

If the bankruptcy proceeds, it will be company’s third in less than a decade.

Hostess has about 18,500 employees, 33 bakeries, 565 distribution centers, and 570 bakery outlet stores, according to the company’s website.

Judge Drain scheduled the mediation that he will lead for Tuesday. In addition to Hostess and the striking union, the company’s largest union, the International Brotherhood of Teamsters, and its lenders could also participate.

“The parties are going to give it their best shot,” the judge said.

Teamsters General Secretary-Treasurer Ken Hall on Monday called the mediation a positive step forward. “The Teamsters will closely monitor the mediation between the BCTGM and Hostess management and assist in any way we can to help the two sides reach an agreement that keeps the company’s doors open,” Mr. Hall said in a statement.

Even if Hostess and the bakers union can come to an agreement, the company still faces challenges.

“At this point, your honor, our customers know we’re going out of business,” Hostess attorney Heather Lennox said in court. “It would be very hard for us to recover from this damage, your honor, even if there were to be an agreement in the near term.”

In January, Hostess filed for its third bankruptcy, claiming it couldn’t compete in the face of unbearable pension and medical benefit obligations and the economic downturn. At the time of the filing, the company had tens of thousands of creditors, including the Bakery & Confectionery Union & Industry International Pension Fund, and estimated it owed more than $1 billion, but only had assets of between $500 million and $1 billion.

It sells about $2 billion of its products annually.

“The company’s cost structure left it poorly positioned to respond to a worsening economy, increased competition and consolidation in the industry that has given other bakery companies major economies of scale and workforce advantages,” Hostess said at the time.

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