Hostess Brands said Wednesday that it filed for Chapter 11 bankruptcy protection, citing high labor costs and a deteriorating economic environment.
The 82-year-old iconic maker of Twinkie and Wonder Bread said it received a commitment for $75 million in debtor-in-possession financing from a group of existing lenders, led by Silver Point Capital.
The financing will allow Hostess to conduct normal business while undertaking a broad restructuring to boost competitiveness, the company said in a statement.
Hostess plans to "continue operating its bakeries, outlet stores and distribution centers and delivering its
products to its customers across the country."
The Texas-based firm said significant cost pressures had hindered its ability to compete, "primarily due to legacy pension and medical benefit obligations and restrictive work rules."
Hostess, which employs roughly 19,000 people, said its labor costs, combined with the economic downturn, had squeezed funding and prompted the decision to restructure.
The company emerged from bankruptcy in 2009, but the restructuring efforts at that time were insufficient, the company said.
Executives sounded positive that the firm was ripe for a turnaround after reorganization.
"Hostess has some of our industry's most powerful and resilient brands," President and CEO Brian Driscoll said. "With generations of loyal consumers, numerous iconic products and a talented and experienced workforce, Hostess Brands has tremendous inherent strengths to build upon."