Hostess, the Irving-based maker of beloved school-lunch snacks like the Twinkie and the Ho-Ho, is in financial trouble, according to the Wall Street Journal. A source tells the paper that the processed food giant will file for Chapter 11 bankruptcy protection as soon as this week.
Hostess also owes more than $50 million to vendors, which have been demanding payments on shortened time frames because of Hostess's financial condition, one of the people said. Most of those goods and services were provided to Hostess within the past three weeks or so.
The move doesn't mean the Twinkie is dead, but it does indicate serious financial turmoil within the corporation. This will be the second time the company has filed for Chapter 11 bankruptcy. Twinkies themselves have been selling well, but attempts to diversify into high-end baked goods have backfired. Like the airlines (which should really serve Twinkies), Hostess is also trying to get out from under its labor contracts, and filing for bankruptcy can "provide troubled companies a bargaining chip to try and get concessions from unionized workers," the Journal reminds.