Sunday, November 18, 2012

Hostess Brought Down by Unions? Not So Fast.

The media story going around is that unions demanding reasonable pensions (aka in biz/political speek "outrageous demands" are what brought down Hostess Brands.  As usual the news media is choosing to go with the story that their fat cat backers want promoted.

But even the New York Times report had to admit in  As Labor Talks Collapse, Hostess Turns Out Lights:
new private equity backers loaded the company with debt, making it difficult to invest in new equipment. Earlier this year, Hostess had more than $860 million of debt

And a report "Creditors Say Hostess Pay Is Questionable" published April at the Wall Street Journal said at that time:

Creditors of Hostess Brands Inc. said in court papers the company may have "manipulated" its executives' salaries higher in the months leading up to its Chapter 11 filing, in what the creditors called a possible effort by Hostess to "sidestep" Bankruptcy Code compensation provisions.
The committee representing Hostess's unsecured creditors alleges that information it has gathered suggests "the possibility" that the company converted a chunk of its top executives' pay from performance-based bonuses to salary, "at least in part to sidestep" rules designed to ensure that companies in bankruptcy aren't enticing their employees to stay on board with the promise ...
Also see:  Hostess Blames Union For Bankruptcy After Tripling CEO’s Pay  from which I got the WSJ link, though not the NYT's one.  

Their reference to the Journal article could easily be overlooked, allowing a troll to say -- well that's just Think Progress again.  No, it wasn't, it was the Wall Street Journal reporting on court records.

Picture at top above of Long Barn Garden (owned previous to Sissinghurst by the famous couple) is used via Creative Commons License Attribution (CC by 2.0) thanks to Flickr user Jack Holloway who has no connection to this blog or blogger. Link under picture goes to original site where he offers more info on it.

Picture lower on left used via Creative Commons License Attribution (CC by 2.0) thanks to The Knowles Collection at which also has no connection to this blog or blogger.  It was placed for all those in mourning over the demise of Twinkies, etc. 

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