Wednesday, November 21, 2012

The Hostess Bankruptcy And The Threat Of A PBGC Bailout

by Ivan Osorio on November 20, 2012

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.  If this looks like an oncoming slow-motion train wreck, that’s because it is — and taxpayers are standing on the tracksTo Read More……

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