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Maker of the Twinkie files for bankruptcy protection

Many Florida residents surely enjoy a Twinkie or a Ding Dong from time to time. And while some may prefer one tasty treat to the other, the fact remains that the sale of these snack foods have declined. This has put the maker Hostess Brands Inc. in a tough financial spot.

Now, in an attempt to yet again reorganize, the company has filed for Chapter 11 bankruptcy. This is the second time that Hostess has filed, as the company just emerged from bankruptcy in 2009, after filing for protection in 2004.

Now, according to the filing, the company has more than $860 million in debt. The claim is that Hostess is struggling due to an increase in the cost of ingredients and high labor costs.

Sales of the once widely popular Twinkie have also declined. For the year ending Dec. 25, the company reportedly sold 36 million packages of Twinkies. This represents a 2 percent decrease in sales from the year prior.

Hostess operates in 49 states -- including Florida -- and employs approximately 19,000 workers.

At the time of the 2004 bankruptcy filing the company was called Interstate Bakeries. In that filing, high fixed costs and low sales were noted as the reasons for the filing.

Looking to the future, in Chapter 11 a business files a reorganization plan, which lays out details regarding how creditors are going to be paid back over a certain amount of time. From there, the group or class of creditors gets to vote on whether or not to accept the plan. If the creditors agree, a contractual agreement will most likely be created between Hostess and the creditors, with the goal being to get the company out of bankruptcy and move on to continue and be a profitable business once again.

Source: CBS News, "Twinkies maker Hostess Inc. files for bankruptcy," Jan. 11, 2012

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