In January, our blog reported on how Texas-based Hostess Brands Inc. -- the food company behind such classics as Wonder Bread, Twinkies, DingDongs and HoHos -- filed for Chapter 11 bankruptcy.

For those unfamiliar with this form of bankruptcy, it typically entails a debtor proposing a plan of reorganization outlining how it will keep its business alive and pay off creditors over the course of time.

Here, Hostess indicated in court documents that it plans to keep its business operations afloat with $75 million debtor-in-possession financing from a New York investment firm, and listed assets of $1 billion and debts/liabilities exceeding $1 billion.

In recent developments, the company is now seeking to reach an agreement with its unions that would enable it to sell some of its brands -- Hostess CupCakes, Drake's and Dolly Madison -- as a means of generating much-needed revenue.

Reports indicate that the unions are leery of selling the individual brands due to concerns that it will create greater financial instability in the already shaky company. At the same, they also appear open to such sales if the proceeds will be funneled back into the business.

The companies that may line up to purchase these individual brands include Bimbo Bakeries (Entenmann's), Flower Foods (Tastykakes) and McKee Foods (Little Debbie).

Interestingly, Hostess filed for Chapter 11 bankruptcy back in 2004 and completed its restructuring/reorganization in February 2009. However, the company indicated that this implemented only "incremental change," and recently asked the bankruptcy judge to allow it to throw out outstanding pension obligations and collective bargaining agreements.

This important decision -- which could have a significant impact on whether the company folds -- is expected to be made sometime over the next few weeks.

Stay tuned for future developments from our San Antonio bankruptcy blog ...

Regardless of your financial situation, contact an experienced legal professional to learn more about your rights and your options under Chapter 7 bankruptcy or Chapter 13 bankruptcy.

This post is for informational purposes only and is not to be construed as legal advice.

Sources:

Fox Business, "Hostess trying to sell brands to raise cash" March 27, 2012

The Los Angeles Times, "Hostess files for Chapter 11" Jan. 12, 2012