After winning important labor relief, Hostess Brands Inc., Irving, Texas, filed a plan to pay creditors and emerge from Chapter 11 protection.

The company won court approval to impose new labor terms on the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and then filed a plan that would hand most of its ownership to a group of its existing lenders, Silver Point Finance, LLC, which would get a 75% stake in the restructured company, subject to dilution, while its unions would get the remaining 25% stake.

Hostess filed for Chapter 11 bankruptcy protection in January. The company filed a motion Jan. 25 seeking authority to reject collective bargaining agreements with its two biggest unions, BCT and the International Brotherhood of Teamsters. The Teamsters, representing 7,500 of Hostess' 18,500 workers, voted to accept the offer, but the bakers union turned it down. The BCT local voted 39-1 later to reject the company's latest demands for concessions.

The plan, which Hostess indicates will mean "sacrifices at virtually all stakeholder levels” in order to preserve "one of America's oldest and most iconic baking companies," is subject to court approval. Gregory F. Rayburn, Hostess's chairman and chief executive, says that Hostess hopes to exit Chapter 11 in the next few months.

“The plan sets forth the blueprint for Hostess to emerge from bankruptcy," Rayburn states. "We will continue to work toward putting the pieces in place for that emergence so that we can thrive again as a robust competitor and continue to serve our loyal customers for years to come."

The plan incorporates changes to Hostess's operations and balance sheet, and the company plans to close several bakeries, upgrade its delivery fleet and close unprofitable retail stores.