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UPDATED 6:15 PM ET: Hostess Brands, the bankrupt maker of Twinkies snack cakes, received court permission to wind down its 82-year-old business on Thursday but revealed "furious" interest in its iconic brands from potential buyers.
New York Bankruptcy Court Judge Robert Drain approved the final orders that cleared the way for the company to begin selling its assets, everything from brands such as Ding Dongs and Twinkies to baking equipment and real estate.
"It's undisputed they will be worth more moving down this path," Drain said of the wind-down plan.
Around 110 potential bidders have contacted the company about bidding for at least part of its business, and 70 had enough interest to sign confidentiality agreements, Hostess' banker told the hearing in White Plains, N.Y.
Joshua Scherer of Perella Weinberg, who was hired by Hostess to sell its assets, said that six potential bidders have hired large investment banks to help them.
"It's very significant because it indicates to me that not only are these buyers serious, but they are expecting to spend substantial sums," said Scherer. He said the liquidation could raise $1 billion.
Scherer described the level of incoming calls from potential bidders as "fast and furious." Interested parties include large national retailers and overseas buyers that wanted to bring Hostess brands to India, he said.
By early January, the company expects to have initial bids for its various brands, which will then be put to auction.
Hostess Brands also is asking for a judge's approval to give its top executives bonuses totaling up to $1.8 million as part of its wind-down plans.
The company says the incentive pay is needed to retain the 19 corporate officers and "high-level managers" during the liquidation process, which could take about a year. Two of those executives would be eligible for additional rewards depending on how efficiently they carry out the liquidation. The bonuses would be in addition to their regular pay.
The bonuses do not include pay for CEO Gregory Rayburn, who was brought on as a restructuring expert earlier this year. Rayburn is being paid $125,000 a month.
Hostess is seeking final approval for its wind-down, which was approved on an interim basis last week.
The company's shuttering means loss of about 18,000 jobs.
In court Thursday, an attorney for Hostess noted that the company is no longer able to pay retiree benefits, which come to about $1.1 million a month. Hostess stopped contributing to its union pension plans more than a year ago.
The company's demise came after years of management turmoil, with workers saying the company failed to invest in updating its products. In January, Hostess filed for its second Chapter 11 bankruptcy in less than a decade, citing steep costs associated with its unionized work force.
Although Hostess was able to reach a new contract agreement with its largest union, its second biggest union rejected the terms and went on strike Nov. 9. A week later, Hostess announced its plans to liquidate, saying the strike crippled its ability to maintain normal production.
Information from the Associated Press and Reuters was included in this report.
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