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Blaming this bankruptcy on strikes is so utterly, transparently horseshit. I hope pundits call them out on this.

Nobody is blaming the bankruptcy on strikes; they were in bankruptcy long before this strike. What's happened as a result of the strike is that their Chapter 11 (restructuring) has changed to Chapter 7 (liquidation), because they are not capable of generating revenue if they can't reliably produce products, and their operational overhead is huge.

I think "nobody" is a bit inaccurate:

Seattle PI (AP): "The Irving, Texas, company said a nationwide strike crippled its ability to make and deliver its products, which also include Ding Dongs, Ho Ho's and Home Pride bread."


MSN (Reuters): "Nearly 18,500 workers will lose their jobs as the company succumbs to the crippling effects of a nationwide union strike."


Read other articles this morning (sorry I don't have them on-hand) that are also pinning this on strikes, mostly because AFAIK Hostess is trying to pin it on the strikes.

The strike is crippling them. But the strikes themselves aren't the systemic cause of Hostess Brands bankruptcy, which started long before this round of strikes. Demand for Hostess offerings is down, and Hostess' overhead is atypically high for its industry.

Right, so we agree then.

In a liquidation the common stock holders get nothing until all claims are paid. Who are the biggest creditors to Hostess? I will bet you dollars to donettes that Ripplewood holdings is somehow a creditor and not a stockholder. The money from the sale of the valuable brand names will surely flow to them; someone will start making Wonder bread and Twinkees free of legacy union liabilities; and the share of national income that flows to working people will notch down again.

The article Zero Hedge quotes from states repeatedly that Ripplewood bought equity first, and then more equity and some debt.

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