Hostess Managers 75 Percent Bonus Challenged: Too Generous?
Hostess managers are planning to give management a 75 percent bonus of their annual salary, according to new reports, but face a challenge from the U.S. Justice Department.
Hostess Brans Inc. has applied for permission to make the massive payment to its management staff in an effort to ensure they do not leave as the company begins to wind down.
However, the company behind the Twinkie has been challenged on its generous offer by an agent for the U.S. Justice Department to see if the bankruptcy plan is too generous to its management.
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According to the Chicago Tribune, a U.S. Trustee agent for the Justice Department has argued in court documents that Hostess' proposals are improper. The agent is requesting that an independent trustee be appointed to oversee the distribution of the company's assets.
The demise of Hostess has shocked Twinkie lovers over the past week as it announced that it was starting liquidation of the company's assets. New ownership is likely to go to the highest bidder.
The CEO of Hostess Brands, Gregory Rayburn has said in an interview with ABC News: "I think we'll find buyers. A few have surfaced already since Friday expressing interest in the brand to acquire them."
In other reports El Grupo Bimbo is interested in acquiring the company. The Mexican-based company already owns other major food chains including Thomas' English Muffins, Sara Lee and Entenmann's.
Hostess announced last week that it is seeking permission from a federal bankruptcy court to close the business, shocking the industry.
The move threatens the jobs of about 18,500 Hostess employees, as well as 33 bakeries, 565 distribution centers and 570 outlet stores.
Hostess has previously filed for bankruptcy on two separate occasions; first in 2004 and more recently in January 2012.
