Beleaguered Twinkies and Wonder Bread maker Hostess Brands has appointed Gregory Rayburn as CEO to lead it out of Chapter 11 bankruptcy, replacing Brian Driscoll, whose resignation was effective on Friday.
According to a company statement, Rayburn has 29 years’ experience working with troubled businesses and leading companies out of bankruptcy, including as chief restructuring officer (CRO) of WorldCom, in what was then the largest bankruptcy filing in US history. He joined Hostess Brands as CRO last month.
“Hostess has been in business for more than 80 years and has established a powerful and valuable brand,” Rayburn said. “I look forward to working closely with the management team and all of Hostess’s key constituents so that we can emerge from Chapter 11 as a company with a strong future that leverages its many strengths.”
Hostess filed for Chapter 11 bankruptcy in January to allow it to restructure, citing pension and medical benefit obligations, restrictive work rules, a continuing difficult economic climate, and a more difficult competitive landscape.
It said at that time that it would seek to reach an agreement with unions over labor agreements, as employee costs had squeezed the company, in addition to higher ingredient prices, and a more competitive US bakery sector.
Ken Hall, vice president of the Teamsters Union, which represents 7,500 Hostess workers, said that Rayburn’s appointment was “unexpected” but the union would continue to work toward a resolution.
“Obviously the situation with Hostess has been and remains extremely challenging, but as we have said before, we are committed to finding a comprehensive fix to the company’s challenges that works for our members,” he said.
“We have negotiations with Hostess and relevant stakeholders scheduled over the next two weeks to work toward that goal.”
Meanwhile, leaders of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) have blamed “ineffective executives” for the company’s problems. The BCTGM represents more than 5,000 workers at Hostess Brands, and claims it worked with Hostess for months prior to the bankruptcy filing to reach an agreement that would address the company’s financial difficulties.
Hostess Brands has about 19,000 employees and owes more than $1bn to creditors.