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Judge Orders Hostess To Mediate With Union

NEW YORK (CBSNewYork/AP) -- Twinkies won't die that easily after all.

Hostess Brands Inc. and its second-largest union will go into mediation to try and resolve their differences, meaning the Irving, Texas-based company won't go out of business just yet.

WCBS 880's Irene Cornell reports


The news came Monday after Hostess moved to liquidate and sell off its assets in bankruptcy court citing a crippling strike last week.

The federal bankruptcy judge hearing the case says that the parties haven't gone through the critical step of mediation and asked the lawyer for the bakery's union to ask his client, who wasn't present, if he would agree to participate.

The judge said he will act as mediator between the two sides in an effort to try to save more than 18,000 jobs that would be lost if Hostess goes out of business.

Hostess CEO Greg Rayburn said he is in support of the mediation and hopes a deal can be reached to save the company.

"I rarely run into people that can't tell me a favorite product from when they grew up and I can tell you my 8-year-old eats them all the time. It's the only time any of my sons have ever cared what company I was trying to help. He's all into it," Rayburn told WCBS 880's Irene Cornell.

Rayburn told Cornell he's well aware of the high-price boxes of Hostess products being sold online after news of the company's bankruptcy was announced last week.

"Sales are not the issue. We sell $2.5 billion worth of these products, that's a lot of Twinkies, Ding Dongs, Ho Hos and Wonderbread and you name it. It's the cost structure and if you can't sell it at a profit, then you're not in business," Rayburn said.

The case is being heard by the U.S. Bankruptcy Court in the Southern District of New York in White Plains, N.Y.

(TM and Copyright 2012 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2012 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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