Unresolved Hostess Contract Disputes May Hinder Bankruptcy Agreement

by Joel R. Glucksman on April 19, 2012

Union workers and Hostess Brands management have failed to reach an agreement in employee contract negotiations, which may serve as another obstacle to the company’s bankruptcy reorganization.

The company filed for protection under bankruptcy law in January, and since that period, Hostess has been working on new union contract negotiations that will allow it successfully to reorganize and avoid liquidation, according to The Associated Press. Although Hostess has said it will petition the court to throw out existing union contracts if workers fail to agree with its final offer, the union submitted a counteroffer last week and threatened to strike if the contracts were tossed, the AP reports.