Hostess Brands, a producer of bakery products in the US, and the company's largest union have agreed to enter a confidential mediation to resolve their differences in order to avoid the liquidation of the company.
While the company sought approval to close its operations, the US Bankruptcy Court for the Southern District of New York asked the company and the Bakery, Confectionary, Tobacco and Grain Millers Union (BCTGM) to consider mediation.
The liquidation would lead to the closure of 33 bakeries, 565 distribution centres, approximately 5,500 delivery routes and 570 bakery outlets across the US. It would also result in the loss of up to 18,500 jobs.
Hostess Brands, which has been affected by increasing debts, soaring labor costs and the changing tastes of consumers, filed for bankruptcy in January 2012 for the second time in its history, declaring assets of $982m and debt of $1.43bn.
Hostess Brands sought permission to liquidate after BCTGM began a nationwide strike, protesting the company's contract offer with lowered wages and benefits.
