How can a business effectively navigate a Chapter 11 bankruptcy when unions are involved?

After two bankruptcies and a series of failed talks with unions, Hostess Brands stopped production of its famous sweets and breads and will sell off its assets to the highest bidder. The American creator of classic junk food items such as the Twinkie, Sno Ball, and Ho Ho shut down its plants on Friday and plans to begin selling off its brands.

Hostess claims that all this occurred after labor contract talks fell through and union workers went on strike to protest proposed wage and benefit cuts. However, members of the Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTGM) union tell a very different story.

Advantages to selling off assets during a bankruptcy

Digital Domain Media Group accepted a bid by a joint venture spearheaded by Beijing Galloping Horse Film & TV Production Co Ltd and Reliance MediaWorks to purchase over $30.2 million in assets as part of the company’s Chapter 11 bankruptcy proceedings. The sale is scheduled to be finalized by both parties and approved by the bankruptcy court. This case offers an example of selling off assets during a bankruptcy in order to repay debts to creditors.