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View Diary: Inside the Hostess Bankery (260 comments)

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  •  bob - it's uncommon that equity holders (5+ / 0-)

    receive anything even from a Chapter 11, and in this case it looks like it is transitioning to a Chapter 7 bankruptcy. I have not read the court documents so I know no facts in this specific situation but I would be surprised if there will be enough proceeds to even pay off all the substantial debt at Hostess and all equity holders are subordinate to debt repayments if full.

    However, I like the idea of an earned equity stake by employees because in most sales there is no bankruptcy in progress and  the equity does have real value. In Silicon Valley we do that through stock options and it's something that should be done on a broader basis.

    "let's talk about that"

    by VClib on Sun Nov 18, 2012 at 06:44:05 AM PST

    [ Parent ]

    •  Teamsters negotiated for a 25% equity stake (2+ / 0-)
      Recommended by:
      VClib, lonespark
      •  25% of nothing (4+ / 0-)
        Recommended by:
        sethtriggs, kurt, lonespark, Sparhawk

        It has been pointed out elsewhere that by the time this offer was made , the company had no value, or negative value.   I at first thought this sounded like a fair offer, but even 100% of nothing is still nothing.

        Hostess was killed by a lot of things.  Employment costs were part of that, but no amount of wage cutting would have compensated for the loss of interest in Factory Food or the cost of diesel to drive it across the country every night.

        Religion gives men the strength to do what should not be done.

        by bobtmn on Sun Nov 18, 2012 at 07:42:23 AM PST

        [ Parent ]

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