Hostess: Betrayal without remedy.

[techs]

Techs may be wrong about no remedies, when the executives of Hostess should go to jail, straight to jail, and lose all their illegal money.

I'm just quoting the lawyer who said that in this situation there is no remedy. Obviously he could be wrong. However, I have heard of other companies underfunding their pensions and haven't heard anything about penalties or ciminality.

What I think is clear is that Hostess executives were either completely incompetent or they were content to run the company into the ground as long as they were getting paid big bucks.

 

[werepossum]

They did steal wages, just not via a payroll deduction. If you read the articles, in wage negotiations the company agreed to an hourly wage increase in the form of a company pension contribution.

They then spent the money on operations and executive salaries instead of making the agreed-on pension contributions.

That's a different situation from the usual under-funded pensions that many companies have -- this is agreeing to a 28-cent an hour wage increase and then pocketing it.

Money the company agrees to contribute is still company money, NOT stolen workers' money. Legally there is quite a difference; although I doubt they could do so outside of bankruptcy protection, it makes zero sense to contribute to pensions when the company is trying to stay afloat. Remember also that under bankruptcy protection, all raises and bonuses have to be approved by the judge or trustee. Evidently the federal judge did not see this as theft from employees.

don't matter. Nothing is 100%. IF the courts start refuseing to give the bonus if they don't turn the company around you won't get CEO's. well not any that can actually turn around the business.

I have no problem with the bonus. the stuff i have read about the pension though is bullshit though.

But these are bonuses approved AFTER the judge agrees the company cannot be saved - incentive bonuses to keep current management on while whatever viable parts of Hostess are spun off as lucratively as possible, to minimize creditors' and stockholders' losses. There is no longer any possibility of turning around the company, merely the process of liquidating it. Just seems wrong to be rewarding those who failed to save it. Why would we assume that the very management team who failed to save Hostess should be paid extra to liquidate it?

 

[MagnusTheBrewer]

Same old, same old. The schmucks who owe millions NEVER go without. It's the guy who's short a couple hundred that ends up out on the street.

 

[Pr0d1gy]

lol Damn Unions screwing over the Hostess executives again, huh?

 

[werepossum]

Here's the sad part. From other stories on Hostess it is clear that when sales were dropping due to consumers preference for healthier foods, Hostess practically refused to do what its competitors were doing. Make healthier, or at least trendier products.

Apparently the corporate executives didn't want to take any risks that might cost them their cushy jobs. So they just kept cutting corners, cutting wages, deferring modernization, etc while the company was spiraling downward.

In fact the unions in a previous negotiations had proposed a temporary wage reduction with the money to be used for new products. Hostess declined the offer.

So, while practically every food company and restaurant chain in America was responding to the changing marketplace for healthier foods, Hostess basically made the decision to ride their company all the way to the end with a failing business model.

But at least their executives got paid.

Since Hostess' only problem was management and the unions absolutely know what needs to be done, clearly the unions need to buy Hostess and run it themselves. Right about now they could get it at fire sale prices, so there's no excuse to not put up.

Otherwise this is all so much fart gas.

 

[WackyDan]

Your article does bring up one good point though - why is the bankruptcy judge awarding bonuses to executives who failed to save the company?

Because those executives need incentive to stick around during the liquidation of the company. Same argument was made when AIG management was getting what amounted to retention bonuses. It is a very valid practice.

 

[WackyDan]

I have no issue with the bonuses. I am against messing with peoples pensions. the sad part is many places do it now. that should be very against the law.

They didn't mess with the pensions or steal from the pension funds... they simply stopped contributing and the unions were informed of it as they should have been. Nothing was done wrong in that regard.

 

[Doppel]

This seems a small matter in the grand scheme of the company and its feasibility.

 

[WackyDan]

All of you idiots who think the unions were responsible for Hostess shutting down might want to look at the History of Interstate Bakeries. Read about CEO Charles Sullivan and his CFO. This was simply the result of continued mismanagement from the top down dating back to 1999. The company was robbed blind at the very top. Here are some of the management team perks just 6 months prior to filing chapter 11.

Brian Driscoll, CEO, from around $750,000 to $2,550,000

Gary Wandscheider, EVP, $500,000 to $900,000

John Stewart, EVP, $400,000 to $700,000

David Loeser, EVP, $375,000 to $656,256

Kent Magill, EVP, $375,000 to $656,256

Richard Seban, EVP, $375,00o to $656,256

John Akeson, SVP, $300,000 to $480,000

Steven Birgfeld, SVP, $240,000 to $360,000

Martha Ross, SVP, $240,000 to $360,000

Rob Kissick, SVP, $182,000 t0 $273,008

These were simply the latest but, by no means, the greatest thieves. I repeat, read about Charles Sullivan and learn how Hostess shutting it's doors in 2012 was the direct result of his raping the company in 1999 followed by a host of management scavengers.

Mismanaged? Yes. Overcompensated? Probably not based on Hostess being a multi billion dollar operation. Those salaries are not out of line and nor did they contribute much to Hostess shutting down... Those salaries do not add up to the $300 million dollar a year losses now do they? Note: All of Hostess management took the same 8% pay cut as the unions did in their last contract negotiation.

 

[MagnusTheBrewer]

Because those executives need incentive to stick around during the liquidation of the company. Same argument was made when AIG management was getting what amounted to retention bonuses. It is a very valid practice.

Tell me again why the very executives who killed the company are needed to stick around during it's burial? I've got to hand it to you, nothing like standing up for blatant robber barons in the face of overwhelming facts.

 

[MagnusTheBrewer]

Mismanaged? Yes. Overcompensated? Probably not based on Hostess being a multi billion dollar operation. Those salaries are not out of line and nor did they contribute much to Hostess shutting down... Those salaries do not add up to the $300 million dollar a year losses now do they? Note: All of Hostess management took the same 8% pay cut as the unions did in their last contract negotiation.

Did you bother to read up on Charles Sullivan?

 

[werepossum]

They didn't mess with the pensions or steal from the pension funds... they simply stopped contributing and the unions were informed of it as they should have been. Nothing was done wrong in that regard.

Agreed.

Because those executives need incentive to stick around during the liquidation of the company. Same argument was made when AIG management was getting what amounted to retention bonuses. It is a very valid practice.

But WHY? Why do we need those particular executives to the point that they deserve bonuses for sticking around?

This seems a small matter in the grand scheme of the company and its feasibility.

Agreed - but it's always the little things that piss us off the most. LOL

 

[WackyDan]

Tell me again why the very executives who killed the company are needed to stick around during it's burial? I've got to hand it to you, nothing like standing up for blatant robber barons in the face of overwhelming facts.

Overwhelming facts point to mismanagement - True. Then you need to go after the Board of Directors of the company and not the management in the end.

There are also overwhelming facts that point the finger equally at the unions. Can you explain why the driver who delivers twinkies can't also deliver Bread... On the same truck to the same fucking store? Yes, the union fought against consolidation and efficiency that may have helped cut some of the losses.

 

[IronWing]

He's one of those people that thinks that even though the company was teetering they should continue to pay into people's pensions. Seems to me that a more realistic person would prefer to have a job with no employer contribution than no job at all. But hey.... where is the sense in that?

The company stole the pension money. This shouldn't be that difficult to understand. It was theft. The execs should be in prison because they are thieves. Labor disputes and bankruptcy are separate issues.

 

[WackyDan]

Quote:
Originally Posted by WackyDan View Post
Because those executives need incentive to stick around during the liquidation of the company. Same argument was made when AIG management was getting what amounted to retention bonuses. It is a very valid practice.
But WHY? Why do we need those particular executives to the point that they deserve bonuses for sticking around?

Simply this... At some level they do know what they are doing and know how to run their portion of the company - regardless of how badly it was run beforehand. You are not going to find any qualified management to come in and fill those shoes and have familiarity with their operations while the company is in bankruptcy or liquidation.

 

[WackyDan]

The company stole the pension money. This shouldn't be that difficult to understand. It was theft. The execs should be in prison because they are thieves. Labor disputes and bankruptcy are separate issues.

It is becoming obvious that you haven't read the article or are interpreting it way different;y in a different context.

 

[MagnusTheBrewer]

Simply this... At some level they do know what they are doing and know how to run their portion of the company - regardless of how badly it was run beforehand. You are not going to find any qualified management to come in and fill those shoes and have familiarity with their operations while the company is in bankruptcy or liquidation.

You really are hopeless. Where do you get this supposed competency from? And how many liquidations have you been through?

 

[Wreckem]

The company stole the pension money. This shouldn't be that difficult to understand. It was theft. The execs should be in prison because they are thieves. Labor disputes and bankruptcy are separate issues.

Breaking a contract isn't a criminal offense. It was a sorry ass bastard thing to do, but it wasn't criminal.

Hostess was just doing what every other corporation does, shift their costs to a govt agency. Fortunately this govt agency only gets money from insurance premiums so no tax payer dollars will be paid out. Down side is, Im not sure if the pensioners get their full payouts, and I seriously doubt they will get any of the extra money Hostess raided.

 

[wirednuts]

seriously, something is seriously wrong. you cant have a company that sells 10 cent cakes for $2 each with the most desirable label in the country and not find a way to be profitable. people never stopped liking hostess, the demand was always there. someone or many people took a shitload of money from that company, no doubt.

 

[IronWing]

It is becoming obvious that you haven't read the article or are interpreting it way different;y in a different context.

Telling an employee that "I will no longer pay into the pension fund for future work" is one thing. The employee can take it or leave it. Telling an employee "That money you already earned? Well, I decided to spend it on something else, like bonuses for top brass, and I didn't put it into the pension plan as agreed to" is something else entirely. And that something else is theft and fraud. Hostess did the later. The employees performed the work as agreed and Hostess stole their earnings.

 

[Paratus]

I think the problems for unions now is that their threat has been neutralized. Strikes can threaten a companies profitability but when the execs can make enough tanking a company who cares what the union can do.

 

[Darwin333]

I'm not surprised it took so long f...kers are quite proud of their accomplishment.

 

[Pray To Jesus]

Thank you, come again.

 

[Greenman]

It's odd that all this was happening while a judge was overseeing operations. Is looting a failing company an accepted business practice?

 

[Lemon law]

Ah yes, punt the issue to the board of directors of Hostess. I have no problem with that, put the board of directors in jail too. Why did those rat finks authorize huge bonuses to Hostess executives when the company was being mis manged? When the board of directors were equally responsible for the tax payer rip off, why should they escape criminal liability. After all, only the board of directors could have authorized Hostess executives who did not pay their pension obligations while they authorized huge bones to clearly incompetent Hostess executives.

As fools on this forum seem to think, only hostess workers should take the wage cuts. Where does it stop, shall we authorize hostess workers to work for less than minimum wage as the only proper solution. As only the top 1% that are incompetent deserve the lions share of American wealth as the 99% deserve nothing. As the more incompetent that top 1% get, the less the 99% should get.