WHITE PLAINS, N.Y. (AP) - Twinkies will live to see another day.
Hostess Brands Inc. and its second largest union agreed on Monday to go into mediation to try to resolve their differences after a bankruptcy court judge concluded that the parties hadn't gone through the critical step. That means the maker of the spongy cake with the mysterious cream in the middle won't go out of business yet.
The news comes after the maker of Ho Ho's, Ding Dongs and Wonder Bread last week moved to liquidate and sell off its assets in bankruptcy court. The company cited a crippling strike started on Nov. 9 by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union that started, which represents about 30 percent of Hostess workers.
"Many people, myself included, have serious questions as to the logic behind this strike," said Judge Robert Drain, who heard the case in the U.S. Bankruptcy Court in the Southern District of New York in White Plains, N.Y. "Not to have gone through that step leaves a huge question mark in this case."
The mediation talks are expected to begin today, with the liquidation hearing set to resume on Wednesday. After Monday's hearing, Jeff Freund, an attorney for the bakers union, said any guess as to how the talks will go would be "purely speculative."
In an interview following the hearing, CEO Gregory Rayburn said that there is enormous financial pressure to come to an agreement with the union by today's end. He noted that it's costing Hostess about $1 million a day in payroll costs alone to keep the company alive.