Explaining Southern California's economy

Hostess bankruptcy: It's the trouble with Twinkies

Hostess Twinkies Celebrate 75th Anniversary

Tim Boyle/Getty Images

Four of the Twinkies that (ahem) drove Hostess Brands into a second bankruptcy since 2004.

Don't worry: the Twinkie supply won't dry up. Hostess Brands, however, is filing for Chapter 11 bankruptcy for the second time in the past decade. Last time around, it set a record for languishing in restructuring. And even though a bankruptcy double-dip is never a good thing, Hostess' investors have enough confidence in the ongoing strength of the Twinkie-and-Wonder Bread market to produce additional financing.

Hostess, like a lot of companies that have been around for a while, has both a debt and a legacy cost/union problem. Total debt is "more than $860 million," according the Wall Street Journal. The pension plan is underfunded by $2 billion and fairly complicated, to boot, covering far more than employees than actually work for Hostess. And the union contracts...well, Chapter 11 will provide the excuse to renegotiate them.

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