Commentary is blaming unions.. Well, isn’t that what you’d expect from a Bain Capital liquidation?

Here is the timeline:

By December 2011 it was reported that Hostess Brands was on the verge of filing for bankruptcy a second time after it suspended payments for union pensions and was struggling to remain current on its $700 million loan.

On January 10, 2012, Hostess Brands filed for Chapter 11 Bankruptcy for the second time. In a statement in its filing, the company said it “is not competitive, primarily due to legacy pension and medical benefit obligations and restrictive work rules.” The company said it employs 19,000 people and carries more than $860 million in debt. The company said it would continue to operate with $75 million debtor-in-possession financing from Monarch Alternative Capital, Silver Point Capital and other investors…

Television talk show hostess Wendy Williams started a “Save The Twinkie” publicity campaign shortly after the bankruptcy filing. The campaign included promotions on The Wendy Williams Show…

In March 2012, Brian Driscoll resigned from his position as CEO. Gregory Rayburn, who had been hired and named Chief Restructuring Officer only nine days earlier, assumed the leadership position. Fortune reported that unions within the organization had been unhappy with Driscoll’s proposed compensation package of $1.5 million, plus cash incentives and a $1.95 million “long term compensation” package. Additionally, the court had discovered that Hostess executives had received raises of up to 80% the year prior. In an effort to restore relations, Rayburn cut the salaries of the four top Hostess executives to $1, to be restored on January 1 the following year…

In July 2012, the New York Post reported that negotiations (lead by Silver Point Capital) with the Teamsters Union were close to a possible agreement that could allow Hostess Brands to cut employee pay and benefits, if the company maintained funding of existing pension plans…

In May, all 19,000 workers had been warned (as required by the Worker Adjustment and Retraining Notification Act) that they could face a mass layoff. In an email to the Appeal-Democrat Hostess spokesman Erik Halvorson said that the May notices were to alert employees to possible sale or wind down of the company, but that “our goal is still to emerge from bankruptcy as a growing company with a strong future.” These layoff notices listed the dates as July 7–21, but on July 5 another company spokesman told the Financial News & Daily Record that there were no immediate plans to start laying off Hostess employees…

These layoff notices listed the dates as July 7–21, but on July 5 another company spokesman told the Financial News & Daily Record that there were no immediate plans to start laying off Hostess employees…

In November 2012, Hostess employees nationwide went on strike. The Bakery, Confectionery, Tobacco Workers and Grain Millers’ International Union, which represents 6,600 Hostess employees, took the strike action after the latest contract proposal from Hostess Brands was rejected by 92 percent of its members. In response, Hostess Brands issued the following statement: “A widespread strike will cause Hostess brands to liquidate if we are unable to produce or deliver products. If that’s the case, the company will move promptly to lay off most of its 18,300-member workforce and focus on selling its assets to the highest bidders. We urge our employees to remain on the job to rebuild the company…

Today, on November 16, 2012, Hostess announced that it was ceasing plant operations and laying off most of its 18,500 employees. It stated that it intended to sell off all of its assets, including the well known brand names, and liquidate…

The CEO, Gregory F. Rayburn stated, “Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders….

There you go. As was typically done by Bain Capital, preditory companies practiced vulture capitlism upon one of America’s icons. Move in, pay yourself highly, saddle the company with debt, declare bankruptcy, and use the employees pension to reward yourself and your investors…..

For this greed, we no longer get Twinkies, (until they come from China)….

There is a solution. Legally make pension plans the first item that gets reimbursed when a company goes bankrupt and gets sold for assets. It is simply arbitrary that our legal system puts investors before employees. The order can easily be changed.

The significance of that change in wording, means that taking over a profitable company, saddling it down with debt, then selling it’s pieces, will cause you a loss. The employees will get the assets. Better to invest your money in building a new company from the ground up…. and hire more people… not fire 18,500….

Perhaps our government can step in and cut out GE Capital and give employees a chance, like we did with GM and Chrysler? After all, the Twinkie is just as great of an American Icon….