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Twinkie-maker Hostess files for bankruptcy (UPDATES)

Hostess Brands Inc., which makes Twinkies, HoHos and Wonder Bread, filed for Chapter 11 bankruptcy protection on Wednesday.

Twinkie bankruptcy 2012 01 10Enlarge
A Hostess Twinkie golden sponge cake with its creamy filling exposed. (Tim Boyle/Getty Images)

Hostess Brands Inc., which makes Twinkies, HoHos and Wonder Bread, has filed for Chapter 11 bankruptcy protection. The Irving, Texas-based company filed on Wednesday.

High labor costs and increasing prices for ingredients like sugar and flour are exceeding the privately-held company’s $2.5 billion in yearly sales, making it difficult for Hostess to pay vendors and keep up with interest payments on the $860 million debt it carries, the Wall Street Journal reported.

Customers’ increased interest in healthier foods isn’t helping either.

Sales of Twinkies declined 2 percent last year, the Wall Street Journal reported.

According to MSN Money:

Twinkies have an "F" grade from the nutrition website Calorie Count because they pack a whopping 150 calories. That means that these snacks have evolved from a daily treat in kids' lunches to an occasional food.

(They didn’t seem to do their creator, bakery manager James Dewar, any harm, however. Dewar claimed he ate at least two packets of them a week, MSN Money reported, and he lived to be 88.)

It's the second time the company has filed for Chapter 11, the Street reported. The company also sought bankruptcy protection in 2004, emerging from bankruptcy court in 2009.

"We remain hopeful that we can reach an agreement that will allow us to amend our labor contracts so that we can emerge from Chapter 11 as a highly competitive company that provides secure jobs for our employees," Hostess President and CEO Brian J. Driscoll said in a statement, the New York Times reported. Driscoll added that the company doesn't expect the supply of its baked goods to be disrupted, according to the Times.

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http://www.globalpost.com/dispatch/news/regions/americas/united-states/120110/twinkie-hostess-chapter-11-bankruptcy-wonderbread