One Last Update on the Hostess Mediation Tomorrow

Hostess, Bakers Union Agree to Mediation says this:

"Hostess Brands Inc. and its striking union agreed to mediation Monday to avoid the immediate liquidation of the baker of Ho Hos, Twinkies and Wonder Bread.

Judge Robert Drain of the U.S. Bankruptcy Court in White Plains, N.Y., said attorneys representing Hostess and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union will participate in mediation Tuesday in a bid to avoid the loss of more than 18,000 jobs.

"My desire to do this is prompted primarily by the potential loss of over 18,000 jobs as well as my belief that there is a possibility to resolve this matter notwithstanding the losses that the debtors have incurred over the last week or so and the difficulty of reorganizing this company in the first place," the judge said.

He will preside over a mediation session Tuesday afternoon. If they're not successful, then Hostess will return to court Wednesday morning to seek to move forward with its liquidation.

Besides Hostess and the Bakers union, the judge said Hostess's bankruptcy lenders and representatives of its largest union, the International Brotherhood of Teamsters, could also attend the confidential mediation session.

"The parties are going to give it their best shot," he added.

Hostess went to bankruptcy court Monday to request authorization to begin the process of shutting down its business.

Hostess attorney Heather Lennox told Judge Drain that the strike the bakers union launched Nov. 9 to protest labor concessions hurt the company's finances beyond repair.

"At this point, your honor, our customers know we're going out of business. It would be very hard for us to recover from this damage, your honor, even if there were to be an agreement in the near term," she said.

However, the judge quickly asked whether it would be more appropriate to try mediation first.

"To me, not to have gone through that step leaves a huge question mark over this case, which I think--I may be wrong--but I think will only be answered in litigation. And that's no one's desired outcome," the judge said.

Judge Drain also said he didn't understand why the union didn't fight the labor concessions in court when it had the chance, instead staying silent as the judge presided over a trial and ultimately ruled that Hostess could impose the new terms on the union.

"The bakers union did not object to the relief that was sought. I want to repeat that. Unlike other unions, the bakers union did not object to the debtor's motion to reject the collective bargaining agreement and to impose the new last, best and final offer terms on the union," he said. "Given that fact, I find it somewhat unusual, to say the least, and perhaps illogical."

Bakers union attorney Jeffrey R. Freund of Bredhoff & Kaiser said the union has been "crystal clear" about what it believed needed to be done in order to make Hostess a viable company.

"We laid that out," he said, "again and again and again and again.""

Summing Up

One last chance for the bakers' union to grow up and do the right thing.

My guess is they'll have lots of "help" in deciding just what that right thing to do is.

And they'll need it, too, being the dimwits that they've demonstrated themselves to be.

Thanks. Bob.