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Four of the Twinkies that (ahem) drove Hostess Brands into a second bankruptcy since 2004.
Hostess Brands, the company that makes Twinkies, is in bankruptcy — the second time since 2004. And if it can't come to terms with both its creditors and its union workforce, it could be game over for the allegedly indestructible cream-filled cake-y yellow tube of fun and all its snack-y brethren. A strike looms. This is from CNNMoney:
"We would no longer have cash to keep operating," said Hostess management in a letter sent to employees on Monday. "All Hostess Brands operations would shut down and liquidation would begin. The 18,500 jobs, plus the health insurance that comes with them, would be lost for good."
The company filed for bankruptcy in January...[M]anagement has said that the investors who are financing the company during bankruptcy would pull out if there is a strike.
Liquidation means that Hostess Brands would essentially be sold for parts. And you have to figure that, if there's anyone out there interested in the Twinkies brand, it would be snapped up in a serious hurry. However, this really looks more like brinksmanship, between management and labor — a classic labor struggle, with this latest bankruptcy taking on a distinctly strategic flavor. The idea is to dispense with labor obligations.
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Magic Johnson sits with Frank McCourt during the game between the Los Angeles Dodgers and the San Diego Padres in the home opener at Petco Park on April 5, 2012 in San Diego, California.
Ahead of an April 13 hearing in the Los Angeles Dodgers' bankruptcy case, the team's soon-to-be-new-owners-if-all-goes-well and the team's debtholders are filing court documents. This may or may not shed light on the structure of the deal, but it will certainly provide a bit more transparency on the $2.15 billion purchase price Guggenheim Baseball Management agreed on with Frank McCourt than we've had so far.
I have access to the court documents but may have to take some time to sort through them. So stay posted.
At the L.A. Times, Bill Shaikin summarizes the story up to this point. He's also tweeting his way through the documents at @BillShaikin. Worth a follow for sure!
UPDATE: The official purchase price is $1.59 billion. Then there's the debt Guggenheim Baseball Management (GBM) is taking on, a bit more than $412 million. There's your $2 billion price tag. The parking lots side deal, remember, is $150 million for GBM, with McCourt providing the other $150 million. Total deal size is really $2.3 billion.
From L to R: Earvin "Magic" Johnson, Stan Kasten and Peter Guber, three of the four front men in Guggenheim Baseball Partners, the group that placed the winning bid for the L.A. Dodgers.
LABiz Observed's Mark Lacter talked with KPCC's Steve Julian this morning about some lingering questions regarding the sale of the Dodgers to Magic Johnson, Stan Kasten, Peter Guber, and Guggenheim Partners — a group now collectively known as "Guggenheim Baseball Management." The big question is about the financing of the deal. It's reportedly an "all cash" deal, meaning no debt is going in. But a purchase price of $2.15 billion makes me wonder about that. So do the vast ambitions of Guggenheim, which currently include a deal that dwarfs the Dodgers sale: the $500 billion purchase of Deutsche Bank's U.S. assets.
Still, Can the Magic team really be bringing that much cash to the table? Back when the price was speculated to be around $1.5 billion (that was two weeks ago), the guy with the largest checkbook was hedge-fund king Steven Cohen, who was thought to be bringing in personal net worth of $8 billion and nearly $1 billion is cash.
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The bleachers stand empty at Dodger Stadium in Los Angeles, California. You can see Frank McCourt's precious parking lots in the background.
Forget that Magic Johnson, Stan Kasten, Peter Guber, and Guggenheim Partners — as "Guggenheim Baseball Management" — are buying the L.A. Dodgers for $2 billion. Everyone really wants to know what's going on with Frank McCourt and the massive parking lots!
At L.A. Weekly, David Futch summarizes:
Though many wanted him gone for good, under the sales terms, McCourt will be co-owner of the surrounding lands. In essence, he purchased the Dodger acreage from himself along with his new partner, a still-unnamed affiliate of Guggenheim.
McCourt has dreamed of a major development that could substantially alter the deliberately scruffy, artsy Echo Park vibe. Locals fear that the tin-ear McCourt will champion something along the lines of The Grove in the Fairfax District, an upscale mall that’s anethema to Eastsiders — many of whom make a sport of dumping on cookie-cutter chain stores and Muzak drifting from outdoor speakers shaped like boulders.
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New Dodgers owner? Earvin "Magic" Johnson arrives at the Annual Harold Pump Foundation Gala Honoring Magic Johnson And Bill Russell at the Beverly Hilton Hotel, on August 13, 2009 in Beverly Hills, California.
As everyone who cares (i.e, the entire city of Los Angeles) now knows, Magic Johnson, Stan Kasten, Peter Guber and financing cohort Guggenheim Partners are buying the L.A. Dodgers for a whopping $2 billion, the highest price ever paid for a pro sports franchise (it blows away the $1.1 billion that the Miami Dolphins went for in 2009).
Somehow, between last week and last night, Magic Johnson and his partners went from reportedly scrambling to raise more cash on their $1.6-billion bid to bringing another $400 million to the table ($550 million, if you count the parking lot deal being done on the side with Dodgers owner Frank McCourt).
The bankruptcy court still needs to review this bid, but what about Major League Baseball? The owners who voted to allow the three bidding groups — Steven Cohen and Stan Kroenke were the other two — to advance to a final auction, conducted by McCourt, have now learned that McCourt and Guggenheim CEO Mark Walter apparently cut a deal with no auction, for substantially more than anticipated.