Posted by Steven L. Robinson on lbo-talk: “In the Great Depression, the folk wisdom was that baking was a depression-proof industry. Companies like the bakers of WonderBread kept their doors open when other industries failed. That may no longer be the case. Interstate Bakeries, the baker of WonderBread and Hostess Twinkies, was once the largest bakery in the country. In the early 2000’s it fell on hard times and–whether due to the Atkins diet, over-leverage or litigation–it filed for bankruptcy in 2004. Since that time, rumors have circulated as to its ultimate fate, a persistent one being that it would be bought by Bimbo, a Mexican owned bakery. Now, it seems it may emerge from bankruptcy partly owned by its unions. –SR”
Interstate Bakeries offers part ownership to unions
By ERIC PALMER
The Kansas City Star
The two most contentious parties in the long-running bankruptcy of Interstate Bakeries Corp. have decided it’s better to make up than to break up.
If the peace accord is approved, organized labor could end up owning a slice of one of the nation’s largest bakers.
During more than four years in bankruptcy, the International Brotherhood of Teamsters, whose members sell and deliver Interstate’s Wonder bread and Hostess Twinkies, has been the most vocal critic of Interstate’s restructuring proposals. Officials once said the union would rather see the company go out of business than to work with its current management.
The Teamsters, Interstate’s largest union, a year ago went so far as to break off communication with the wholesale baker in a fight over additional concessions Interstate wanted.
Instead, it decided to negotiate contract changes directly with Ripplewood Holdings, the company that has agreed to buy Interstate out of bankruptcy.
Read the rest of the article.