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FSSK Legal Blog

Bringing you the latest and most informative legal information.

How does a bankruptcy like Hostess's affect the economy?

hostess-cupcake

Many major news outlets like The Washington Post and Reuters keep tabs of all the well-known businesses who are currently filing for bankruptcy. Their journalism makes high-profile bankruptcies become hot news items.

One example of this is Hostess's bankruptcy. In 2012, the company received permission in bankruptcy court to liquidate its assets and has since garnered interest from other companies who wish to buy the business. This past weekend, one of Hostess’ creditors - Silver Point Capital - and hedge fund Hurst Capital expressed interest in purchasing Hostess’s snack cake brands (including the famous Twinkie brand). The company has already sold its Wonder Bread and Beefsteak bread brands, to name a few. 

Most Americans learned about Hostess’s bankruptcy almost immediately – and many of us continue to follow with a bit of interest. Why is this? The publicity of the bankruptcy comes partly because Hostess has been a part of many American’s lives since childhood. It is a company with deep American roots and a long-standing presence on grocery stores shelves.

But the other factor is that whenever a company goes out of business, the economy is affected.

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