Hostess Brands Inc., Irving, Tex., is reportedly preparing to file for Chapter 11 bankruptcy protection, say people familiar with the matter. The move would mark the second significant court restructuring for the Twinkies and Wonder Bread baker in the past several years.
The privately held company, which employs roughly 19,000 people and carries more than $860 million in debt, has been facing a cash squeeze along with high labor costs and rising prices for sugar, flour and other ingredients, sources say. Those costs together have proved higher than the company's roughly $2.5 billion in annual sales, creating losses and cash shortfalls, the sources add.