Hostess Brands Inc. will fire over 80% of its employees after a bankruptcy court judgment that also allows the company to begin looking for a buyer.
Bloomberg News reported that U.S. Bankruptcy Judge Robert Drain in an interim judgment Wednesday approved the company's request to close, starting a sale that could generate an estimated $1 billion.
Hostess, which operates a 370-employee bakery in Biddeford, owns a number of long-standing snack brands, including Wonder bread, Ding Dongs, Twinkies and Suzy Qs.
The news service reported that Drain's interim judgment approved the Hostess's sale of its retail locations and return of excess ingredients and packaging as well as the firings, and that final approval of the company's closure plans will be considered Thursday.
Drain rejected the company's request to move its case to a Chapter 7 liquidation from Chapter 11, a process that would hand control of the process to a trustee.
After declaring bankruptcy in January, the company received court approval to impose pay and benefit cuts for its employees. In response to its financial troubles, the company also stopped paying into workers' pension funds, a decision that was not negotiated with its employee union.
That move sparked a nationwide strike that began earlier this month.
The company and union made a last-ditch negotiation effort last week but was unable to reach an agreement.