Twinkie production may have ceased, but pension obligations for its now-defunct maker haven't gone away – though the bankrupt and now-closed Hostess Brands Inc. says it needs to cut those costs.
According to Bloomberg, the company told a New York bankruptcy court Friday that it needs to cut $1.1 million a month in retiree benefits as part of its liquidation plan.
U.S. Bankruptcy Judge Robert Drain approved the formation of a committee made up of retired employees who will be able to speak on their own behalf as part of future bankruptcy hearings. The judge is being asked to consider Hostess's plans, announced earlier this month, to close the entire company and a separate move to pay out $1.75 million in executive incentive bonuses to managers as part of the shut-down of the company.
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Unionized company employees went on strike Nov. 9, opposing an imposed contract arranged by Drain which would have cut employee benefits and wages. The company countered by saying it was losing too much money during the strike and decided to shutter its entire operations, though many buyers have stepped forward, interested in purchasing components of the Hostess brands.
Both the union and its pension fund have asked Drain to appoint a trustee to oversee the wind-down of operations.
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