Stockholders own the business, a diverse pool of Capital.
They elect and employ Directors to be the best brains available to guide the company.
The Directors hire professional Management, to Operate the company. Often they are working under contract, which includes a clause that if the business fails, due to market conditions, we still get paid for the contract period. Just taking on a company that might fail, carries the risk of being seen as the cause, when seeking other employment. So the higher the risk of failing, the higher risk to career management being seen as the cause, the better the parachute.
On the other side, saving the company, returning it to being profitable, is Bonus Country. Stockholders, Directors, Workers did not do it, Professional Management did, they get a bonus for winning.
The failure here was in the product, customers quit buying. Bleached flour, refined sugar, corn sugar, a long list of additives, is just what everyone says do not eat. Overhead was all the product was supporting, factories and workers, and it fell below that level. The only cut left was workers. It could not be run without Management.
Filing for bankruptcy as a means of reducing the one cost that could be reduced, Labor Contracts, as you cannot get people to sell you bleached flour, refined sugar, electric power, for less than going rates.
The Directors would have put it up for a stockholder vote, do we run it into debt, or liquidate? The Owners voted to give it a try to reduce costs through bankruptcy, which labor rejected, so the only course left is, selling off the assets, paying all outstanding debts, including Management Contracts,
After resolving all debts, the stockholders own what is left. While Hostess was a well known Brand, Twinkie and Ding Dong known product names, they have fallen out of favor, would not sell for much, without the products, the marketing chain, which Little Debbie might buy for the shelf space, but might get more value out of letting it die.
Another way to preserve stockholder value is moving to a right to work state, dumping the in house Unions, but the Teamsters own the road, so that contract stands.
Mexico is another option, and using Mexican trucks to deliver to warehouses, and Teamsters to ship from there.
That still has risks because Little Debbie could make copycat products, which at low cost would eat into the market share. The Binkie and Ring Rong wars.
Assets besides the Brands are machines written off years ago, some commercial real estate, and perhaps a diverse collection of stock holdings in Little Debbie, Bleached flour, sugar, corn sugar, suppliers, and Teamster Pension Fund owned Casinos. Companies protect their place in the market.
No one has mentioned if Hostess had a Pension Fund, Pension Obligations can be ended in court. That leaves money set aside for pensions available.
The majority stockholders are most likely Pension Funds, they just about equal the total Market Cap of all stock.
They have a large share of a company, hire a Hedge Fund to acquire more, then vote the Board of Directors out, replace the Management, go bankrupt to get out of company pensions, fire the workers, and move the company to China. Or Mexico.
Bain Capital did not do this, he was a hired gun, his customers did, and Pension Funds are the largest stock holders. Institutional Investors, are the largest danger to a Free Market. None own 10%, where they would be regulated, but one day six with almost 10% vote you out of your company.
The Bakers, Millers, and Tobacco Union got greedy, then they got unemployed.
Everything you spend goes to the Corporations, who are owned by the Pension Funds, who are owned by Government Workers. Somehow our Public Employees have wound up owning everything.
No regulation of corporate raiders? Wall Street? Big Banks? Credit Cards? Why would the owners regulate themselves? Congress is exempt from Insider Trading Regulations.
Besides owning everything, they also tax the workers, run up debt, and make the Laws. They also have all other companies Tax Records.
All Government says this is fair in a free market.
Will there be a deal to reduce Corporate Tax Rates? Yes.
Will Capital Gains stay low? Yes.
Will those making a few million pay more? Yes.
While there is an ethical question about government owning everything, making and enforcing rules, the Government says there is no problem, they have an Ethics Board, and they approved it.
23 Nov 2012, 8:34 pm
the health nazis put such of the fear of god into me that if i so much as thought about those treats that i would stroke out with a cholesterol-bulging aneurism. 
