Hostess bankruptcy hearing: Judge orders Hostess to mediate with union

NEW YORK (KABC) -- During a bankruptcy hearing on Monday, a judge ordered Hostess Brands Inc. to go into mediation with its second largest union.

The news means the company will not go out of business just yet. The judge said the parties have not gone through the critical step of mediation and asked the lawyer for the bakery's union to ask his client, who wasn't present, if he would agree to participate.

Hostess filed for bankruptcy Friday, citing several problems, including management turmoil and rising labor costs. The shuttering would mean the loss of about 18,500 jobs. Last week, thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike after rejecting the company's latest contract offer that cut wages and benefits.

Several other companies have expressed interest in many of the Hostess brands, including Twinkies, so even if Hostess did go out of business, the golden spongecakes likely will be around for awhile. Twinkies alone brought in $68 million in revenue so far this year.

Analysts say Flowers Foods Inc. and private equity food investment firm Metropoulos & Co. are likely suitors, but Hostess has not commented on those reports.

The Associated Press contributed to this report.

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