In the ongoing story regarding bankrupt bakery giant Hostess its former St. Louis factories are set to be auctioned off to pay creditors according to a story published in the St. Louis Business Journal. The facilities are located on North Broadway and East Taylor and do not yet have an asking price. They will be auctioned off at an auction supervised by the bankruptcy court later this summer. In addition to the St. Louis plants there are other Missouri properties being sold including those in St. Charles and Overland.
According to reports in addition to the real estate the company handling Hostess’ assets will also be auctioning off machinery, equipment, and rolling stock assets that Hostess still owns. Earlier this year a judge approved the sale of Hostess’ brands in order to liquidate assets to pay back creditors. CBS news reports that the last of these brands was sold off recently bringing the total proceeds from the liquidating to around $860 million.
This recent round of troubles for the company began in early 2012 when Hostess filed for Chapter 11 bankruptcy protection. It stated that it was no longer competitive due to pension and medical benefit obligations as well as because of restrictive work rules. After failed negotiations with Union leaders the company announced that it would cease operations and sell off its assets in November of 2012. A bankruptcy court judge ruled against converting the Chapter 11 bankruptcy to a Chapter 7 liquidation bankruptcy that would have been overseen by a bankruptcy trustee.
Chapter 11 bankruptcy allows a business or person to stay in business and retain assets while restructuring debts and stopping debt collection efforts. On the other hand in a Chapter 7 bankruptcy, a trustee liquidates all assets and distributes the proceeds among creditors who have claims.
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