The Hostess Bankruptcy And The Threat Of A PBGC Bailout

Openmarket.org

On Friday, November 16, Hostess Brands announced it was shutting down operations after the Bakers, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), which rejected the company’s last contract offer in September, announced it would go on strike. (Today, the two parties entered into a last-ditch negotiation effort today to avoid liquidation.)

The same day, the Pension Benefit Guaranty Corporation (PBGC), the federally created agency that insures private sector pensions, announced that its deficit had increased from $26 billion to $34 billion over the past year.

Then yesterday, Hostess announced that  it would pass off its pension liabilities to the PBGC.

http://www.openmarket.org/2012/11/20/the-hostes

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