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Hostess Bankruptcy Filing Could Cost Over 1300 Jobs in Illinois

Posted on in Bankruptcy

As Hostess continues its bankruptcy fight with unions, the prolonged battle looks to have an impact on Illinois residents. The fight, which is over Hostess's plan to cut labor costs, could have a significant impact on the local labor force.

In May, Hostess sent off potential layoff notices to over 18,500 of its employees, with 1,380 of them going to workers in plants based in Illinois. The workers are located at bakeries in Cook County and Peoria and include those based in distribution centers and retail locations across the state.

In January, Hostess filed for Chapter 11 bankruptcy, citing rising pension and health care costs as a factor in the decision to file for bankruptcy. About 85 percent of its workers are currently union workers, and the company asked union leaders to agree to modify union contracts in order to avoid liquidation. When the unions refused, Hostess was forced into bankruptcy court.

A judge ruled that Hostess could renegotiate contracts with the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, but would not allow renegotiation with the Brotherhood of Teamsters. A separate lawsuit dealing with contracts with smaller unions is still pending.

Critics claim that this last move is an attempt to strong arm the Brotherhood into renegotiating their contract with Hostess despite the judge's ruling. Hostess claims that it is a last minute effort to reemerge from bankruptcy as a strong company. They further claim that the notices were sent out according to the court's ruling.

If you are considering bankruptcy due to the loss of a job, it is important to seek the help of an experienced Cook County bankruptcy attorney. Contact us today to schedule a consultation.

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