The maker of US favourite cream cake Twinkies is to close down with the loss of up to 18,500 jobs.
Hostess Brands has sought court permission to go out of business after failing to get wage and benefit cuts from thousands of its striking bakery workers.
Hostess, which has about $2.5 billion in sales from a long list of snack cakes and breads, filed the request with the US Bankruptcy Court in New York early this morning.
The Texas-based company said the liquidation would mean that most of its 18,500 employees would lose their jobs.
Hostess immediately suspended operations at all of its 33 plants across the United States as it moves to start liquidating assets, it said.
"We'll be selling the brands and as much of the infrastructure as we can," said company spokesman Lance Ignon. "There is value in the brands. But some bakeries will never open again as bakeries."
Mr Ignon said the company was making final deliveries today of products made last night. Hostess's top-selling products are its chocolate cupcakes, cream-filled Twinkies cakes and its powdered sugar and frosted "Donettes."
Entrepreneurs on auction site eBay are asking as much as $100 for a box of 10 Twinkies - plus $5 shipping - according to one listing that went up shortly after the company's liquidation filing.
Hostess blamed burdensome wage and pension obligations for its financial woes.
It said a strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which began last week, was the latest of a series of labour troubles that had crippled the company's ability to produce and deliver products at several facilities.
A few workers were still walking picket lines early Friday morning, many expressing hope that some of the Hostess operations might survive. They blamed what they characterized as "Wall Street" management for the company's demise.
"The people who are running this company are not interested in making bread," said Roger Harrison (56) who bags buns at the Hostess plant in Lenexa, Kansas, and has been with the company for 35 years.
"They are not in the baking industry; they are just interested in the money," said Mr Harrison. "This company is so unstable that once they close, maybe someone can take over and buy it and give us more stability."
Union President Frank Hurt said management was trying to make union workers the scapegoats for a long-held plan by Wall Street investors to break up Hostess.
Hostess had given employees a deadline to return to work on Thursday, but the union held firm, saying it had already given far more in concessions than workers could bear and that it would not bend further.
The company was asking workers to agree to an 8 per cent pay cut, a 20 per cent increase in healthcare costs, closure of 10 to 12 plants and changes to pension and workday provisions.
"The union has been the death of this company," said a human resources manager who recently left Hostess.
Hostess has 565 distribution centres and 570 bakery outlet stores, as well as the 33 bakeries. Besides Twinkies and Wonder Bread, its brands include Nature's Pride, Dolly Madison, Drake's, Butternut, Home Pride and Merita.
The company said in Friday's court filing that it would probably take about a year to wind down. It will need about 3,200 employees to start that process, but only about 200 after the first few months.
Reuters