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Bankruptcy Court Approves Hostess Wind Down Plan
11/21/2012 4:17 PM ET  

Judge Robert Drain approved the motion after the company and the Bakery, Confectionary, Tobacco and Grain Millers Union were unable to reach an agreement during a last-ditch mediation effort yesterday.

A U.S. Bankruptcy Court has approved Hostess Brands plans to wind down its business and sell off its assets.

Judge Robert Drain approved the motion after the company and the Bakery, Confectionary, Tobacco and Grain Millers Union were unable to reach an agreement during a last-ditch mediation effort yesterday, according to the company.

The union has been on strike after refusing to accept wage and benefit concessions the company insisted were necessary to keep it afloat.  Union members have said they've already accepted deep concessions, and blamed the company's problems on bad management.

Under the agreement, the company will retain about 3,200 workers to help with the first phase of the wind down.  Most of those workers are expected to be gone within four months.  Hostess says it expects the entire shut down process to take about a year.

Under the plan, Hostess will close its 33 bakeries, including one in Biddeford, 565 distribution centers, along with its bakery outlet stores and delivery routes.  Some 18,500 jobs will be lost, among them about 500 at the Biddeford plant.
 

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