Bankrupt Hostess giving execs bonuses
A federal bankruptcy judge has approved bonuses for executives of Hostess, the maker of Twinkies, who stay on as the company is broken up and sold off.
On Thursday, as part of a plan to liquidate the company and lay off 18,000 workers, a federal judge in White Plains, N.Y., approved paying 19 Hostess executives bonuses totaling $1.8 million. Hostess has said it has interest from at least 110 firms who want to buy pieces of the operation.
The decision comes as the company, known for its iconic snack cakes like Ho Hos and Ding Dongs, says it doesn't have enough cash on hand to pay retirement benefits to some former employees.
The bonuses do not include pay for CEO Gregory Rayburn, who was brought on as a restructuring expert earlier this year, according to The Associated Press. Rayburn is being paid $125,000 a month.
Former employees are outraged over the bonuses handed out to high ups.
"Anybody's got a reason to be upset who lost their job if there handing out large amounts of money," Paul Carroll told ABC News.
In a statement overnight, Hostess said the bonuses are designed to keep top brass from leaving before winding down what's left of the company "quickly and cost-effectively."
"I was qualified to draw my pension, with no notice I lost about 70 or 75 percent of it I didn't work 34 years to lose it," Carroll said.
Hostess was given interim approval for its wind-down last week, which gave the company the legal protection to immediately fire 15,000 union workers. Hostess said last week it will retain about 3,200 employees "to assist with the initial phase of the wind-down," which is expected to last about a year.
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