Hostess Brands to terminate pension plan as part of liquidation

[antigop]

Source: Business Insurance

Hostess Brands Inc., Irving, Texas, will terminate its defined benefit plan, and the Pension Benefit Guaranty Corp. will assume its liabilities, said Lance Ignon, Hostess spokesman.

The news follows Hostess' announcement on Friday that it will close its business and sell off all its assets.

Hostess suspended payments to the 42 multiemployer pension plans to which it contributes in August 2011. “For active employees, the circumstances differ for each MEPP, so (participants) should contact the administrator of the MEPP” in which they participate, Mr. Ignon said in an email, citing an employee Q&A document. He could not provide further information by press time.

The company's IBC Defined Benefit Plan had about $56 million in assets and $111 million in liabilities as of April 30, according to the PBGC.

Read more: http://www.businessinsurance.com/article/20121119/NEWS03/121119909

[jerseyjack]

1. PBGC should sue the execs to recover the money they awarded themselves..

[raccoon]

19. A-fricking-men! nt

[cstanleytech]

25. I agree with you there. nt

[Debau2005]

2. Just saw this in another post - about executive bonuses

http://www.bloomberg.com/news/2012-11-19/hostess-liquidation-needs-control-by-trustee-u-s-says.html

[awoke_in_2003]

4. Executives always make out...

and when I have to hear the dumbasses at work saying why the pensions must go, I will bring the executive bonuses up. I already know what they will say "well, it is part of their contracts". Yes, they are so diconnected that they will say this to me. They are the same people who said GM union contracts should be voided, but complained when congress was looking at ways to stop bank execs from getting bonuses after the bailout.

[Xyzse]

13. Yes, and Pensions are also part of a contract.

They just choose what contract they prefer to break.

[awoke_in_2003]

26. I am convinced...

that people hate unions because they are not in one. Because they have no say at their jobs, they don't think anyone should have.

[leftyohiolib]

6. as usual the top will strip the carcass clean leaving the bones for the workers

this "business model" has to go

[brush]

15. Romey's Bain business model. Just what he had in store for us. nt

[argiel1234]

36. this business model should be made illegal with life imprisonment

felony grand larceny

[reteachinwi]

37. Takers

Give themselves bonuses and dump the retirement contracts on the taxpayers.

[jtuck004]

3. Here's a link to the PBGC, they can add this plan to the list on the right side of the page.

http://www.pbgc.gov/wr/trusteed/plans.html

So there are thousands of people being paid from here, sometimes not what they were promised, supposedly from premiums (which are not funding the problem since it has grown larger).

This leaves aside the executives who may have paid themselves $20 million, $40 million, $100 million, leaving this wreckage and tragedy behind for the taxpayers without the capacity to strip them of their ill-gotten gains, wherein they profited by walking away from their bills.

[SomeGuyInEagan]

5. Two must-reads from DailyKos blogs ...

"Inside a Hostess Bakery" - http://www.dailykos.com/story/2012/11/18/1162786/-Inside-the-Hostess-Bankery

"RIP: Hostess Brands 1925 - 2012" - http://www.dailykos.com/story/2012/11/16/1162225/-RIP-Hostess-Brands-1925-2012

[antigop]

12. Thanks -- I hadn't seen those. n/t

[railsback]

7. That was ALWAYS the plan

Willard showed us all how its done: Buy up, saddle company with that debt, overpay execs, and liquidate, leaving the tax payer to make up the difference (i.e. pensions). Reforming vulture capitalism would seem to be imperative, as in not letting them pile their 'investment capital' onto the company they're purchasing. That's just wrong.

[closeupready]

8. Yes, this is exactly correct. Also,

it explains why so many conservatives were fine with Romney's evasion of questions about when he would release his tax returns.

[sulphurdunn]

9. What investment group

of parasites bought and decided to liquidate Hostess for profit? Apparently, elections have consequences for everyone but vulture capitalists. I'd be interested to know how much money that putrescent vulture Mitt Romney made losing his bid to be liquidator and chief of the US?

[byeya]

10. So I have to pay for the pensions and so do you and you and you so that a few capitalists

can further enrich themselves to the detriment of the USA and its rank and file citizens.

I agree with the person who said the full weight of the Justice Dept should come down on the vultures, impound their assets pending a trial(s), and make them pay for the promises made to the workers.

[rurallib]

14. "Externalizing costs" isn't that the biz phrase

every exec who caused this implosion should not get one dime until all worker pensions have been met.

[AtheistCrusader]

11. But of course.

[elleng]

16. Not so fast. Its 'plan' must be approved in U.S. Bankruptcy Court first,

and sounds like it won't be.

http://www.nytimes.com/reuters/2012/11/19/business/19reuters-hostess-bankruptcy-hearing.html?hp

[Fuddnik]

17. Unfortunately, from experience in two of them,

They're just about always approved by the courts.

[closeupready]

27. Yup.

I think it's likely that it will be approved.

[antigop]

24. Where do you get the idea it won't be approved? n/t

[elleng]

32. Article I linked to says:

"The U.S. Trustee, an agent of the U.S. Department of Justice who oversees bankruptcy cases, said in court documents it is opposed to the wind-down plan because Hostess plans improper bonuses to company insiders."

[antigop]

33. Well, the PBGC opposed the termination of pensions from American Airlines

http://www.businessinsurance.com/article/20120205/NEWS03/302059981

Maybe the PBGC will object to the termination of the Hostess pensions?

[cstanleytech]

29. As it should.

Especially after I read the part where it says "The U.S. Trustee, an agent of the U.S. Department of Justice who oversees bankruptcy cases, said in court documents it is opposed to the wind-down plan because Hostess plans improper bonuses to company insiders." as it is totally immoral and unacceptable that the company would still seek to reward failure.

[abelenkpe]

18. This should be illegal

I'm not sure why it's OK to break a contract with workers but not with fucking overpaid executives.

[dmosh42]

21. There is a bill(HR-1322) that has been sitting in the house since at least 2008, which would do....

just what you say. Protect the funds for retirees who have been promised those payments. But the corporate powers have such a hold on Congress, it can't make it to the floor for a vote. And that includes the period when the Dems controlled the housein 08 &'09.

[antigop]

34. This HR 1322?

http://protectseniors.org/index.php?option=com_content&view=article&id=61&Itemid=41

That bill is for protecting retiree health benefits.

[Scalded Nun]

20. Here, my friends, are your rat bastard 'Job Creators'

The only creating they do is for their own benefit. If workers get jobs, maybe even benefits, then that is really collateral damage to their plans (but they will live with that until they figure out a way to recoup much of that as well, pretty much what is going on here). They do not give a rat's ass about anyone but themselves, and until something gets put into place in this country this is all anyone should ever expect.
They are evil, treasonous, black-hearted minions of the Devil (for those non-religious readers just substitute your own word for the Devil).

[AzDar]

22. K & R &

[yurbud]

23. so it's all a scam

[tomm2thumbs]

28. So shed all $ obligations, re-sell the company to a 'new' company of the same execs with new name?

and then start making them at obscene profits paid to themselves & stockholders in a low-wage right-to-work state... all the while knowing it was the plan all along with the added benefit of shedding blame to the unions?

Sounds about right, no?

[antigop]

35. DING! DING! DING! WE HAVE A WINNA! nt

[aquart]

30. That should be so illegal you get hanged for it.

[Yo_Mama_Been_Loggin]

31. Taxpayers bail out another corporation.

Private profit and public risk.

[antigop]

38. the PBGC covers pensions of bankrupt companies. IT IS NOT FUNDED BY TAXPAYERS!

http://www.pbgc.gov/about/how-pbgc-operates.html

PBGC receives no funds from general tax revenues. Operations are financed by insurance premiums set by Congress and paid by sponsors of defined benefit plans, investment income, assets from pension plans trusteed by PBGC, and recoveries from the companies formerly responsible for the plans.

[reteachinwi]

39. Thank you

for straightening me out and for the work you do.