Hostess Names CEO To Steer Through Bankruptcy
NEW YORK (AP) – Hostess Brands Inc. on Friday named a new CEO to steer the company through its Chapter 11 bankruptcy reorganization.
The maker of Twinkies, Ding Dongs and Wonder Bread said Gregory F. Rayburn replaces Brian Driscoll, whose resignation is effective immediately. Rayburn, who is 53 and joined Hostess as chief restructuring officer in February, will also oversee the company’s overall strategy and negotiations with its union.
Hostess noted in a statement that Rayburn has had a long career in helping turn around troubled businesses, including as chief restructuring officer for WorldCom during what was then the country’s largest bankruptcy filing in history.
Hostess is a privately held company based in Irving, Texas and filed for Chapter 11 bankruptcy in January; the filing came nearly three years after its predecessor emerged from bankruptcy proceedings. That company, called Interstate Bakeries and based in Kansas City, Mo., filed for bankruptcy protection in 2004 and changed its name to Hostess Brands upon emerging from bankruptcy proceedings.
But Hostess has continued to struggle with increased competition and rising labor costs. Unlike many of its competitors, the company’s 19,000 employees are unionized. That means Hostess has higher pension and medical benefit costs.
For the long term, the company also faces rising concerns among health-conscious Americans who are increasingly moving away from consuming white bread.
The Teamster Union for Hostess workers issued a statement Friday saying that Rayburn’s appointment was “unexpected” but that it would continue to work with the company for a resolution.
(© Copyright 2012 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)
Also Check Out: