UPDATE 4:35 PM ET:
The Associated Press reports that Hostess Brands has received approval in U.S. Bankruptcy Court in the Southern District of New York in White Plains, N.Y. to give its top executives bonuses totaling up to $1.8 million for meeting certain liquidation goals.
The company says the incentive pay is needed to retain the 19 corporate officers and ‘‘high-level managers’’ during the wind down process, which could take about a year.
2:37 PM ET:
Maine 1st District Rep. Chellie Pingree is blasting Hostess Brands' request to pay its top executives $1.8 million in bonuses as the company undergoes liquidation proceedings. The company asked a bankruptcy judge today for permission to pay the bonuses as it winds down its business.
Hostess says the bonuses, from which CEO Gregory Rayburn would be excluded, are needed to keep top corporate officers and managers on the job during the liquidation process, which could take a year.
But Pingree says the company has no business making such a request.
"They should be ashamed to ask for bonuses for executives who just drove a company out of business," Pingree says in a statement. "And the idea that they have to be paid extra just to stay on the job while 500 people in Maine and 18,000 people around the country don't even have a regular paycheck because of poor management practices is outrageous."
Pingree says Hostess already hiked its CEO's compensation by 300 percent and raised executives' pay up to 200 percent earlier this year as bankruptcy loomed. At the same time, she says, the company demanded wage and benefit consessions from workers.
Hostess denies that bad management led to its demise, and blames the liquidation primarily on union demands. The shutdown has left about 500 workers in Maine without jobs, most of them at the Hostess plant in Biddeford. Another 17,500 Hostess employees around the country are also facing unemployment.
Meanwhile, Hostess says it's in talks with about 110 parties interested in buying the company's assets, The Associated Press reports. The potential buyers have not been named, but the AP reports that they include at least five national retailers.