This is a delicious irony.
The blame game is ramping up as Hostess — the maker of Twinkies, Ding Dongs and other popular snack cakes — and its unions headed to bankruptcy court today to square off over whether the company can scrap its labor agreements.
Teamsters Vice President Ken Hall is pointing the finger of blame at hedge fund Silver Point — one of Hostess’ biggest secured creditors — saying the firm would rather force the bakery to liquidate than restructure in bankruptcy.
“I believe they want to make their money and run — unfortunately, with little regard to the 19,000 workers,” Hall told The Post yesterday in an interview.
That’s rich, considering the unions blocked Silver Point from backing a management-led buyout of Hostess in 2008, when it landed in bankruptcy for the first time.
The Teamsters instead threw their weight behind investment firm Ripplewood Holdings, which drove the business into Chapter 11 for a second time in January.
This time around, Silver Point is providing Hostess with bankruptcy financing, giving it more say over the fate of the business.
In what is a double irony, the Teamsters are now being advised by Harry Wilson, a former Silver Point partner who was forced out of the firm in 2008 because of a string of bad investments.
A source close to Hostess also said the senior creditors, including Silver Point and Monarch Capital, are the biggest obstacle to a deal.
However, Silver Point denies any suggestion that this is some sort of payback.
“The lending group, of which Silver Point is one of many members, has provided tremendous support to the company over many years, and any suggestion that it desires to liquidate the company is completely unfounded,” according to a statement from Silver Point.
Silver Point and other secured creditors have provided Hostess with $104 million in emergency loans.
If the two sides can’t reach a compromise before the judge rules following the two-day trial, there is a high risk of liquidation.
In that scenario, the world’s biggest bakery, Grupo Bimbo, may pay more than $200 million for Hostess’ snacks business — potentially enough to give Silver Point a significant recovery, according to one banker.
Meanwhile, Hostess CEO Greg Rayburn said the proposal Hostess made Saturday to its unions that would cut pension liabilities by 75 percent was approved by Silver Point and the other secured creditors. He said the Teamsters’ counteroffer yesterday, which called for a 40 percent cut, was unsatisfactory.
“We’re far apart on pensions, which is the primary critical issue,” he said.
jkosman@nypost.com
Silver Point, secured creditors, secured creditors, Hostess, bankruptcy court, Silver Point.Silver Point, the Teamsters, Ken Hall
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