Judge orders Hostess, union to mediation; liquidation halted for now

NEW YORK (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.

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

Early last Friday, the company announced plans to shut down all distribution centers, including the Tulsa Wonder Bread plant, leaving about 160 people with jobs locally and more than 18,000 company-wide.

The decision came after striking workers failed to return to work by a deadline issued by company leaders.  The company warned employees if they didn't return to work by 5 p.m. EST last Thursday the company would liquidate.

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

The 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.

Hostess was planning to sell off about $29 million in excess product ingredients.

Some of the liquidation money was expected to be used to pay bonuses for senior managers. The rest will go toward shutting down stores and offices.

Meanwhile, baked goods will be sold at going-out-of-business sales, donated to charity or destroyed.

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