March 6, 2013

Union opposes Hostess' bread deals

The union says the sale to Flowers Foods offers no assurances that ex-workers – including those in Maine – would be protected.

By Jessica Hall jhall@pressherald.com
Staff Writer

The bakery union representing former Hostess workers has objected to Hostess Brands Inc.'s planned sale of its bread brands to Flowers Foods Inc., saying the bid offers no assurances that the former employees would be protected.

click image to enlarge

The bakery union representing former Hostess workers objects to the planned sale of Hostess' bread brands to Flowers Foods Inc.

Kennebec Journal File Photo/Joe Phelan

Hostess said last week that Flower Foods would acquire Wonder brands, as well as Butternut, Home Pride, Merita and Nature's Pride, for $360 million after no other qualified bids were received.

In addition to the bread brands, Flowers will acquire 20 bakeries, 38 depots and other assets, including the Hostess plant in Biddeford, which made bread, as well as chocolate cupcakes, Sno Balls and other snack cakes.

In a separate deal, Mexico's Grupo Bimbo was selected as the winning bidder for Hostess' Beefsteak brand with a bid of $31.9 million.

Hostess, which closed its doors in November after years of financial problems and a strike by the bakery union, will ask the U.S. Bankruptcy Court for the Southern District of New York to approve both transactions at a hearing on March 19.

The Industry International Pension Fund also is objecting to the Flowers sale.

The bakery union went on strike Nov. 9 after the bankruptcy court imposed contract concessions opposed by more than 90 percent of the union's members. Hostess shut its doors shortly after the strike began, laying off 18,500 workers, including 500 in Maine.

"Flowers has not committed to preserve a single job, and in fact has affirmatively disclaimed any obligation even to 'consider' employing a single worker," the bakery union and pension fund said in a Feb. 25 court filing. "Thus, while debtors' secured lenders may view Flowers' bids as the 'best' for getting themselves paid, Flowers' bids provide zero assurances that the rights of the debtors' workers will be protected."

Flowers Foods representatives declined to commentTuesday. Hostess did not immediately return calls seeking comment.

Separately, the U.S. attorney in Manhattan objected to the planned bread deals because the buyers would be released from liabilities and obligations to comply with environmental laws.

"The proposed sale order, as currently drafted, would diminish or eliminate the government's ability to enforce generally applicable statutes and regulations, and diminish or eliminate the buyer's and debtor's obligations to comply with environmental, health and safety laws," U.S. Attorney Preet Bharara said in the March 1 objection.

In addition to the bakery brands, Hostess also is pursuing the sale of its remaining brands, which include Hostess, Dolly Madison, Drake's, Sweetheart, Eddy's, Standish Farms and Grandma Emilie's.

 

Staff Writer Jessica Hall can be contacted at 791-6316 or at: jhall@pressherald.com

 

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