Hostess Brands, the wholesale baking company that produces Wonder Bread and junk-food staple "Twinkies," is preparing to file for bankruptcy protection later this week, the second time in eight years the company will have filed for Chapter 11.
According to The Wall Street Journal, the company is carrying more than $860 million in debt amid high labor and rising ingredient costs. Hostess also owes around $50 million to vendors, with most asking for payment for goods and services provided over the past three weeks.
Hostess had previously spent four years in bankruptcy court, filing for Chapter 11 protection in 2004. The company left court in February 2009.
Hostess plans to use $75 million in debtor-in-posession financing to stay afloat during the proceedings, according to the WSJ. Once in court, the Texas-based company will try to reduce its debt and renegotiate its labor contracts with a number of unions.
Sales for Hostess have been flat or stagnant over the past year. Hostess sold over 36 million Twinkies last year, a 2 percent decline compared to the previous year.
The company, once known as Interstate Baking Co., was formed in 1930.