No More Twinkies?

Hostess Brands Preparing for Chapter 11 Filing

By MIKE SPECTOR And JULIE JARGON

Hostess Brands Inc. is preparing to file for Chapter 11 bankruptcy protection as soon as this week, said people familiar with the matter, a move that would mark the second significant court restructuring for the Twinkie and Wonder Bread baker in the past several years.  

The privately held Irving, Texas, company, which employs roughly 19,000 people and carries more than $860 million in debt, has been facing a cash squeeze amid high labor costs and rising prices for sugar, flour and other ingredients, according to people familiar with the matter. Those costs together have proved higher than the company's roughly $2.5 billion in annual sales, creating losses and cash shortfalls, they said.

Hostess also currently owes more than $50 million to vendors, which have been demanding payments on shortened timeframes after delivering goods because of Hostess's financial condition, one of the people said.

Hostess's filing would mark what's known as a "Chapter 22" in restructuring circles, since the company had already sought bankruptcy protection once before. Hostess, before called Interstate Bakeries Corp., slashed debt and costs during a four-year stint in bankruptcy court that began in 2004. The company has struggled since emerging from bankruptcy proceedings in February 2009.

The company's private-equity owner, Ripplewood Holdings, invested $40 million in Hostess last year to no avail. Hedge funds Monarch Alternative Capital, Silver Point Capital and others loaned the company $20 million late last year, but Hostess continues to have cash problems.

Hostess has lined up around $75 million in so-called debtor-in-possession financing to keep the company afloat during bankruptcy proceedings, the people said. Monarch, Silver Point and some other investors have agreed to extend the bankruptcy financing, with an option for other senior creditors to provide parts of the loan, the people said.

Once in bankruptcy court, Hostess will try to reduce debt and renegotiate labor contracts, many of them with the International Brotherhood of Teamsters and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, the people said. Hostess plans to file court papers soon threatening to reject or modify labor contracts under applicable bankruptcy rules, the people said. Such moves provide troubled companies a bargaining chip to try and get concessions from unionized workers.

A Teamsters spokesman declined to comment. A spokeswoman for Hostess's other main union didn't immediately respond to a request for comment.

Sales of Hostess's signature Twinkies have recently declined a bit while the overall bakery snacks category has been about flat. Nearly 36 million packages of Twinkies were sold in the year ending Dec. 25, down almost 2% from a year earlier, according to data from SymphonyIRI Group, a Chicago-based market research firm. The data captures sales from supermarkets, drugstores, mass-market retailers and convenience stores, but excludes sales from Wal-Mart Stores Inc. and club stores.

Even so, Hostess has had trouble attracting consumers who have migrated away from white bread to whole grains and other healthier foods. Hostess released a whole-grain bread called Nature's Pride, but it hasn't sold well amid a small presence on shelves.

In addition, Hostess kept prices relatively high, making it harder to charge even more as costs for ingredients and fuel rose.

Hostess's bankruptcy filing would join the ranks of other companies forced to seek bankruptcy protection a second time in recent years. Between 2007 and 2011, more than 50 companies commenced "Chapter 22" bankruptcy cases, according to the most-recent data compiled by Edward Altman, a New York University finance professor.

One of Hostess's challenges will be to avoid liquidation, the fate of some other companies seeking bankruptcy protection a second time. In the past several years, for instance, Hollywood Video chain owner Movie Gallery Inc. and Polaroid Corp. have gone out of business after seeking bankruptcy protection a second time.

Others have survived multiple bankruptcies, including auto supplier Hayez Lemmerz International and Pliant Corp., a packaging company acquired after its second reorganization.

One sticking point for the baker: It pays about $100 million a year into so-called multi-employer pension plans that cover workers at a wide array of companies, the people said. Hostess, whose pension plan is underfunded by about $2 billion, wants to rescind its obligations to that plan and start paying into a plan that only covers its own workers, one of the people said.

Overall, Hostess carries hundreds of separate labor contracts that the company believes imposes cost burdens, people familiar with the matter said; the company also wants to reduce benefits costs.

The company also hopes that in bankruptcy it can attract new capital to bring production and distribution operations up to date, one of the people said.

Interstate Baking Co., the name Hostess used to go by long ago, was formed in 1930. Some brands Hostess still sells, including Drake's cakes, predate the company. In its infancy, the company made loaves of bread for grocery stores to sell.

In the 1960s and 1970s, the company grew by acquiring several other baking outfits across the U.S. By 1995, the company had changed its name to IBC, and purchased its largest rival, Continental Baking Co., for $330 million, maker of Wonder Bread.

Hostess is being advised by law firm Jones Day and financial services firm Perella Weinberg Partners. Hostess creditors are being advised by investment bank Lazard Ltd.

More information: http://online.wsj.com/article/SB10001424052970204124204577151211961572458.html

The Gingrich Jobs and Growth Plan

My commentary first:
Dave Peatfield  January 09, 2012

As a solid Independent  in the State of New Hampshire, it is a deliberate choice I have made and not indecision that led me there.  I listen to all candidates very carefully and choose my future by having all the facts necessary to make an informed choice!  Committing ones self to one party is narrow minded and not always the best choice in all instances.  

Our country has been dramatically impacted by the divided thought process of going with the "best argument" instead of the right agreement.  Working together is the foundation of every success story, and our nation is far from a success story at this moment in history.  I believe we have lost our focus on "one nation."  

A contract with America is a sound plan.  Hold Senator's and Congressional Leader's accountable for their actions and work from a PLAN instead of a personal agenda.  When a business is deviating from it's goals a critical path is developed to help steer it in the right direction.  A set of common goals is what our country needs to be successful.  After all, you and I have plans and goals that need to be met in our careers and everyday lives, why shouldn't the people that govern us be monitored and measured to an acceptable standard of a passing grade or lay THEM off.  It is high-time they be held accountable for their actions on a daily basis.   

Put the pledge of allegiance back into our schools before our children forget it as well.

"I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all."

I pledge!  Do you?

- Dave Peatfield

The Gingrich Jobs and Growth Plan

America only works when Americans are working. Newt has a pro-growth strategy similar to the proven policies used when he was Speaker to balance the budget, pay down the debt, and create jobs. The plan includes:

1. Stop the 2013 tax increases to promote stability in the economy. Job creation improved after Congress extended tax relief for two years in December. We should make the rates permanent.
2. Make the United States the most desirable location for new business investment through a bold series of tax cuts, including: Eliminating the capital gains tax to make American entrepreneurs more competitive against those in other countries; Dramatically reducing the corporate income tax (among highest in the world) to 12.5%; Allowing for 100% expensing of new equipment to spur innovation and American manufacturing; Ending the death tax permanently.
3. Move toward an optional flat tax of 15% that would allow Americans the freedom to choose to file their taxes on a postcard, saving hundreds of billions in unnecessary costs each year. This optional flat tax system will preserve deductions on charitable giving and home ownership, and create a new personal deduction of $12,000 for every American. This deduction is well above the current poverty level, ensuring that this new system does not unfairly target the poor.
4. Strengthen the dollar by returning to the Reagan-era monetary policies that stopped runaway inflation and reforming the Federal Reserve to promote transparency.
5. Remove obstacles to job creation imposed by destructive and ineffective regulations, programs and bureaucracies. Steps include: Repealing the Sarbanes-Oxley Act, which did nothing to prevent the financial crisis and is holding companies back from making new investments in the U.S; Repealing the Community Reinvestment Act, the abuse of which helped cause the financial crisis; Repealing the Dodd-Frank Law which is killing small independent banks, crippling loans to small businesses and crippling home sales; Breaking up Fannie Mae and Freddie Mac, moving their smaller successors off government guarantees and into the free market; Replacing the Environmental Protection Agency with an Environmental Solutions Agency that works collaboratively with local government and industry to achieve better results; and Modernizing the Food and Drug Administration  to get lifesaving medicines and technologies to patients faster.
6. Implement an American energy policy that removes obstacles to responsible energy development and creates jobs in the United States.
7. Balance the budget by growing the economy, controlling spending, implementing money saving reforms, and replacing destructive policies and regulatory agencies with new approaches.
8. Repeal and replace Obamacare with a pro-jobs, pro-responsibility health plan that puts doctors and patients in charge of health decisions instead of bureaucrats.
   
9. Fundamental reform of entitlement programs with the advice and help of the American people. Read an extended white paper on this here.

OTHER VIDEO'S OF INTEREST:
(Be informed and make an informed decision in 2012 our country's future depends on it!)





Gingrich takes on Romney in NH debate


Newt Gingrich on New Hampshire, South Carolina and Mitt Romney


Newt Gingrich Mocks President Obama-Hilarious!

America vs Big Oil

Dear Reader, Thank President Obaam for standing up to Big Oil and urge him to reject the Keystone XL oil pipeline!   In 2011, we were truly inspired by President Obama's bold decision to delay and reevaluate the dirty, dangerous Keystone XL tar sands oil pipeline. But we now face attacks from greedy oil companies and their cronies in Congress who want to rubberstamp this project, all in the name of greater profits for Big Oil. Tell President Obama we stand strong with his decision to delay the dirty Keystone XL tar sands oil pipeline and that we will fight together in 2012 to reject the project once and for all. President Obama did the right thing by putting the brakes on this dangerous 1,700 mile oil pipeline that would run from Canada through America's heartland and put our land, climate and drinking water at risk. Now the President can put American families ahead of Big Oil profits by rejecting Keystone XL. 2012 will be a seminal year in our fight to move our country Beyond Oil. Big Oil and their cronies in Congress know this as well. And they're in a panic. We're already starting to see a barrage of misinformation. Republican House Majority Leader John Boehner and the other Big Oil allies in Congress are trying to scam the American people with an expensive, unnecessary and dangerous tar sands pipeline to deliver billions in profits to oil companies. Thank President Obama for his bold leadership on Keystone XL and tell him he has your support standing up to Big Oil. The pipeline will not help with energy security, it will create far fewer jobs than promised, the oil brought to the U.S. will be shipped overseas tax-free and there are huge risks to our waterways, farmland and climate - TransCanada's earlier pipeline spilled 14 times in the first 12 months of operation. 2012 will be the year we decide where we stand as a country on moving Beyond Oil. Will you start 2012 by taking a stand against Big Oil? Support strong leadership from President Obama, support his bold decision to stand firm against Big Oil and their cronies in Congress on Keystone XL. Email the President today! Thanks for all that you do to protect the environment, Sarah Hodgdon Sierra Club Conservation Director P.S. After you take action, be sure to forward this alert to your friends and colleagues! Sierra Club 85 Second St. San Francisco, CA 94105

Obama, Congress begin 2012 in oil pipeline dispute

By MATTHEW DALY, Associated Press

WASHINGTON (AP) — President Barack Obama and Congress are starting the election year locked in a tussle over a proposed 1,700-mile (2,735-kilometer) oil pipeline from Canada to Texas that will force the White House to make a politically risky choice between two key Democratic constituencies.

Some unions say the Keystone XL pipeline would create thousands of jobs. Environmentalists fear it could lead to an oil spill disaster.

A law Obama signed just before Christmas that temporarily extended the payroll tax cut included a Republican-written provision compelling him to make a speedy decision on whether to build the pipeline. The administration is warning it would rather say no than rush a decision in an election year.

It's a dicey proposition for Obama, who enjoyed strong support from both organized labor and environmentalists in his winning 2008 campaign for the White House.

Environmental advocates, already disappointed with his failure to achieve climate change legislation and the administration's decision to delay new smog standards, have made it clear that approval of the pipeline would dampen their enthusiasm for Obama in the upcoming November election.

Some liberal donors even threatened to cut off funds to Obama's re-election campaign to protest the project, which opponents say would transport "dirty oil" that requires huge amounts of energy to extract.

If he rejects the pipeline, Obama risks losing support from organized labor, a key part of the Democratic base, for thwarting thousands of jobs.

Obama appeared to have skirted what some dubbed the "Keystone conundrum" in November when the State Department announced it was postponing a decision on the pipeline until after this year's election. Officials said they needed extra time to study routes that avoid an environmentally sensitive area of Nebraska that supplies water to eight states.

The affected area stretches through the Sandhills region of northern Nebraska, but the concerns were serious enough that the state's governor and senators opposed the project until the pipeline was moved.

Republican Gov. Dave Heineman, who opposed the initial route, says he supports efforts to accelerate the project, noting that provisions in the payroll tax bill allow the project developer to find a new route avoiding the Sandhills.

The new route would have to be approved by Nebraska environmental officials and the State Department, which has authority because the pipeline would cross an international border.

The pipeline would carry oil from tar sands in western Canada to refineries in Texas, passing through Montana, South Dakota, Nebraska, Kansas and Oklahoma. The project's developer, Calgary-based TransCanada, says the pipeline could create as many as 20,000 jobs, a figure opponents say is inflated. A State Department report last summer said the pipeline would create up to 6,000 jobs during construction.

The payroll tax cut law gives the Obama administration 60 days to decide whether to allow construction of the pipeline.

An "arbitrary deadline" for the permit decision would compromise the process, short-circuiting time needed to conduct required environmental reviews and preventing the issuance of a permit, the State Department warned in a written statement on Dec. 12. Obama administration officials confirmed that view after the payroll tax bill was approved.

Republicans call the threat little more than an excuse that allows Obama to placate environmental groups while not rejecting the pipeline outright.

"The only thing arbitrary about this decision is the decision by the president to say, 'Well, let's wait until after the next election,' " said House Speaker John Boehner, R-Ohio.

Boehner and other Republicans say the pipeline would help Obama achieve his top priority — creating jobs — without costing a dime of taxpayer money. They hope to portray Obama's reluctance to approve the pipeline as a sign he favors environmentalists over jobs.

Russ Girling, TransCanada's president and chief executive, said his company would do whatever is necessary to make sure the project is approved.

"We've had more than enough surprises on this," said TransCanada spokesman Shawn Howard.

In Nebraska, where the pipeline faces strong resistance, state officials are awaiting an environmental study that will determine a new route. Officials have said the review will take six to nine months.

Some landowners in the Sandhills celebrated the decision to reroute the project, but the pipeline's strongest opponents say they still have concerns about the prospect of the government using its power of eminent domain to seize land, as well as liability issues in case of a spill.

"Republicans have bullied their way to get a reckless rider attached to a bill that was supposed to be about helping middle-class families," said Jane Kleeb, executive director of the group Bold Nebraska, which opposes the pipeline.

With the bill signed into law, Obama "must do the right thing for our land, water and families' health by denying the pipeline permit," Kleeb said.

Project supporters say U.S. rejection of the pipeline would not stop it from being built. Canadian Prime Minister Stephen Harper has said TransCanada could pursue an alternative route through Canada to the West Coast, where oil could be shipped to China and other Asian markets.

"Canada is going to develop this no matter what, and that oil is either going to come to the United States or it's going to go to a place like China. We want it here," said Rep. Fred Upton, R-Mich., chairman of the House Energy and Commerce Committee.

Opponents call the West Coast option farfetched, noting that Canadian regulators have announced a one-year delay for a similar project that would carry tar sands oil to British Columbia, on Canada's western coast.

Native groups strongly oppose both the Keystone XL and the Northern Gateway pipeline proposed by TransCanada rival Enbridge. Canada's First Nations have constitutionally protected treaty rights and unsettled land claims that could allow them to block or significantly delay both pipelines.

Unions are watching closely. Unemployment in construction is far higher than other industries, with more than 1.1 million construction workers jobless, said Brent Bookers, director of construction at the Laborers' International Union of North America.

"For many members of the Laborers, this project is not just a pipeline, it is a lifeline," Bookers said, adding, "Too many hard-working Americans are out of work, and the Keystone XL pipeline will change that dire situation for thousands of them."

Roger Toussaint, international vice president of the Transport Workers Union, opposes the pipeline.

"The dangers of the pipeline are compelling, and no one should believe the claims of either the Republican leadership or the energy companies, with respect to the project being shovel ready or with respect to the number of jobs it's going to produce," he said.

___

Associated Press writer Grant Schulte in Lincoln, Nebraska, contributed to this report.

Silent Swing: On Trips Through NH, Candidates Failing to Talk Conservation

By Eric Orff

Wednesday, January 4, 2012

From Theodore Roosevelt creating the National Parks System to Richard Nixon establishing the Environmental Protection Agency to George H.W. Bush signing a strengthened Clean Air Act, Republicans have a long history of supporting common sense solutions to problems facing our wildlife, air, water and public health. Will this year’s crop of GOP candidates follow that conservative presidential tradition?


So far, the signs aren’t promising. I’ve heard plenty about jobs, but little of protecting the rivers, lakes and wildlife habitat that supports thousands of hunting, fishing and outdoor recreation related jobs across New Hampshire. According to the U.S. Fish and Wildlife Service’s National Survey of Fishing, Hunting and Wildlife, in New Hampshire 228,000 people spent $177 million on fishing in 2006. Every dollar spent on conservation programs here in New Hampshire delivers jobs and economic activity.


Right now the Granite State duck hunters are asking “Where are the ducks?” and fishermen and women are asking “Where is the ice?” Until just a few days ago, going into late December, there was no ice in much of New Hampshire. Worse yet to the north in Maine and beyond winter and the snow and ice normally expected by now has not happened. As a result ducks and geese have been slow to migrate south to the New Hampshire’s coast this fall. And safe ice for this state’s ice fishermen is but a wish for now. Both this state’s hunters and fishermen are impacted by a warming climate. Worse yet all of the dozens of businesses that count on these sportsmen and women are up against a tough economy worsened by the lack of ice and snow. A good old fashioned winter just can’t be counted on any more it seems.


Climate change also poses a threat New Hampshire’s economic health many other ways. The skiing industry directly employs 17,000 people in New Hampshire and pumps $650 million dollars a year into our economy, a revenue stream that’s critically threatened by warmer winters. And if ski resorts are forced to make more snow, it will cost plenty to cover one acre of ski trails with one foot of snow that takes up to 180,000 gallons of water to be pumped. Along with the ski industry is the snowmobile industry which contributes another $1.2 billion dollars to this state’s economy, according to a 2004 UNH study. Snowmobiling supports thousands of jobs as well, especially in the Great North Woods.


So I have a few simple questions for this year’s crop of presidential candidates: Where are the ducks? What’s your plan to protect America’s natural resources? Will you support mainstream values by standing up for the wildlife, our national forests, and clean air and water that enrich all Americans? Or will you be going to Washington, prioritizing special interests and protecting the few at the expense of our environment?


Eric Orff is a wildlife biologist from Epsom. He can be reached at 603-736-4663 or at his web site nhfishandwildlife.com