A federal bankruptcy judge has approved Hostess Brands’ plans to wind itself down, officially putting the Twinkies brand on the auction block.
In granting Hostess’s motion, Judge Robert D. Drain of the Southern District of New York cited the need for a quick and orderly shuttering of the company to avoid letting its assets molder. The alternative, a less-structured Chapter 7 liquidation, would be far worse.
‘‘This estate will suffer substantial diminution if this wind-down plan is not quickly implemented,’’ he said. ‘‘It appears to me that the debtors have taken the right course.’’
Drain’s decision spells the almost certain end of Hostess, an 82-year-old company that survived the Great Depression, numerous wars, and countless low-carb diets. But the company struggled for more than a decade with the public’s increasing fondness for lower-calorie, less-processed snacks.
During a hearing that stretched for more than four hours, company executives and advisers espoused a simple message: Expedited sales of the failed baked-goods maker’s brands will raise the maximum amount of money possible. And letting Hostess begin shutting its doors for good sooner would be kinder to employees.
Advisers sounded confident the liquidation process could yield big recoveries for creditors. ‘’Since we filed the motion, we have received a flood of inquiries and think there can be a healthy competition,’’ said Heather Lennox, a lawyer for Hostess .