Hostess Brands Inc said it will ask a U.S. bankruptcy judge for permission to liquidate if enough striking workers do not return to work by the end of Thursday to let the maker of Twinkies and Wonder Bread resume normal operations.
The announcement escalates a bitter dispute between the company and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, whose members comprise about one-third of Hostess' nearly 18,000 employees.
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Unionized workers at Hostess plants across the country had gone on strike or refused to cross picket lines on Nov. 9 to protest court-ordered pay cuts.
Hostess said that, if enough striking workers did not return to work by 5 p.m. EST (2200 GMT) on Thursday, the company would on Friday ask U.S. Bankruptcy Judge Robert Drain in White Plains, New York, who oversees its Chapter 11 reorganization, for permission to shut down and sell assets.
"We simply do not have the financial resources to survive an ongoing national strike," Hostess Chief Executive Gregory Rayburn said in a statement.
The Irving, Texas-based company previously reached agreement on pay and benefit cuts with the International Brotherhood of Teamsters, its largest union.
A spokesman for the bakers' union was not immediately available for comment.
Hostess said if it wins permission to liquidate, it will begin to close all operations as soon as Nov. 20, two days before Thanksgiving, and fire all plant workers except those needed to prepare its facilities for sale.
Earlier this week, Hostess said the strike forced it to permanently close three of its 36 bakeries, costing 627 jobs.
It said on Wednesday that it still has 65 distribution centers and 570 bakery outlet stores, as well as the 33 other bakeries.
Hostess filed for protection from creditors on Jan. 11, its second bankruptcy filing in less than three years, after failing to win concessions on pension and health benefits. The company had about $860 million of debt at the time.
Founded in 1930, Hostess' brands also include Drake's cakes, Home Pride bread and Dolly Madison ice cream.
The case is In re: Hostess Brands Inc, U.S. Bankruptcy Court, Southern District of New York, No. 12-22052.