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The Bakers Union members have had enough of being blamed for the closing of Hostess Bakeries in the mainstream media. The truth is much more complicated and the media has failed to tell the story. In this film you will hear directly from the Local 218 members in Lenexa, Ks. Be informed before it happens to your family too.

If you or someone you know can't understand why there was a strike at Hostess, watch this film.

When you hear the media narrative about about Hostess and the Bakers Union strike it is impossible to learn the truth. EVERY media outlet leaves out the details the Hedge Funds don't want the public to know. Here are some examples-

1. The Union SELF-FUNDS a large portion of its pension. Each Lenexa, KS worker contributes $4.25 an hour to the pension fund.
2. The 'Company' had collected that money for over a year under the lie that it would eventually be repaid to the pension fund. A total of $50 Million in one year.
3. This debt to the pension was thrown out in bankruptcy court as a debt the 'Company' could not repay. This money has been forever stolen.
4. The 'Company' or 'Hostess' is actually a pair of Hedge Funds, Monarch and Silver Point. It is a privately held business, it is not on the stock market.
5. As a private company the Union cannot view the accounting books for the 'Company'. In court, when the books were opened it became clear the 'Company' was skimming from the pension for a long time. A total of $186 million.
6. This money was stolen by the 'middle man' and never made it to the pension, therefore the Federal insurance plan- Pension Benefit Guarantee Corporation- will not help us. The PBGC is for failing pension funds. It will not cover theft of money that never made it to the pension.
7. Our pension is NOT a part of the secured debt. When you hear that the 'Company' is on the hook for $1 Billion in secured debt remember that does not include the stolen pension money.
8. The secured debt does include the money 'loaned' to the 'Company' by the Hedge Funds. Including the interest on those loans, as high as 15%. The 'Company' IS the hedge funds. In other words they loaned themselves money at a high interest rate and expect everyone to pay for it but themselves.
9. These Hedge Funds never intended to make Hostess profitable. They were always motivated by selling the brand names and infrastructure at the highest value.
10. Bankrupting the company and closing the doors allows them to strip the Unions from the brand names, driving up the resale value of the brand names. They never had to close, it was done as a mechanism to bust the Unions. The added bonus to the Hedge Funds was the ability to blame the strike for the closure.
11. The 'Company' shopped for a bankruptcy judge and found one to their liking. They chose Judge Drain (no pun intended) in New York, despite the facts that the 'Company' is located in Dallas, was previously in Kansas City, and is not on the stock market.
12. The judge helped write the contract with the 'Company' without any Union involvement. The judge granted permission to impose the contract on us before ANY rank and file Union member had seen the contract 'offer'.

When the sale of 'Hostess Brands' is complete the Hedge Funds will pay back the secured debt of approx $1 Billion and pocket anything above that number without paying the pension funds back. Remember that almost half of that debt is loans and interest to THEMSELVES. They will have already profited tens of millions when they 'break even'. In a just society that would never happen.

Most people assume that if you own a business and it goes bankrupt then you don't get to make millions of dollars on the closing. These Hedge Funds and the Congress members they fund have created a legal framework that protects them from ANY risk and leaves the damages at the front door of workers.

It will happen to you too, if you don't pay attention. Do not assume the law is on your side, even though it may have been in years past.

Originally posted to bluebarnstormer on Thu Jan 17, 2013 at 08:29 AM PST.

Also republished by In Support of Labor and Unions.

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Comment Preferences

  •  re claim #2 (1+ / 0-)
    Recommended by:

    I've looked around and haven't been able to find proof of that claim.  I've seen the claim repeated in blogs, but haven't seen anything to disprove my assumption that the amount at issue was actually the company's share of the funding instead of, as is claimed, direct deductions from compensation that the company was to pay as agent over to the pension.

    I've seen the letter you have scanned, but its too low-res for me to make out the text.

    •  Here you go, from the CEOs mouth (6+ / 0-)

      "Hostess Workers' Pension Money Diverted For Other Uses: Report"

      This links to the WSJ which I don't have a membership to. The CEO admits it in his own words. Of course he pretends that it all happened before he was there. It may have started before him but he finished it.

      •  And here is the pension 'borrowing' letter again (5+ / 0-)

        Long story short. They announce they will "temporarily suspend payments" and repay them in the future. That future was thrown out by the judge.

      •  thx, but the WSJ article seems ambiguous (1+ / 0-)
        Recommended by:

        on the one hand, it says that wages were reduced for the pension contributions, but that's still a little ambiguous.  as a legal matter, that could mean the union accepted less in wages in exchange for more company contributions.  

        another passage seems to support that reading:

        " The maneuver probably doesn't violate federal law because the money Hostess failed to put into the pension didn't come directly from employees, experts said."

        I still can't read the letter, but that may be because I'm on my phone.  thanks for providing it again.

        •  And the letter refers to suspending the (1+ / 0-)
          Recommended by:

          company's contributions.  So, given all that, it seems safe to say that the better reading of all this is that the company suspended its contributions and didn't abscond with wages that were deducted from paychecks and which the company would've been obligated to pass on as agent to the pension fund.

          IOW, it seems that we're not talking about self-funded contributions, but company contributions.

          •  Their use of legalese changes nothing. (2+ / 0-)
            Recommended by:
            Noddy, Puddytat

            The WSJ interview with CEO Rayburn proves it. Again-

            Teamster-represented employees at Hostess didn't contribute a portion of their wages toward pensions, a union spokesman said. But among workers in the bakers union, it was "standard practice," said Mr. Rayburn, Hostess's CEO.

        •  No it isn't (4+ / 0-)

          From the article
          "Gregory Rayburn, Hostess's chief executive officer, said in an interview it is "terrible" that employee wages earmarked for the pension were steered elsewhere by the company."

          "It's what lawyers call betrayal without remedy," said James P. Baker, a partner at Baker & McKenzie LLP who specializes in employee benefits and isn't involved in the Hostess case. "It's sad, but that stuff does happen, unfortunately."

          The fact is that we paid $4.25 per hour to our pension. The company was under contract to send $4.25 per hour per employee to the pension. They stopped doing it under false pretenses. You may not be able to read the letter on your phone but that doesn't change it's contents or motives.

          •  Here is the CEO again, same article (3+ / 0-)
            Recommended by:
            Noddy, Puddytat, radical simplicity

            Teamster-represented employees at Hostess didn't contribute a portion of their wages toward pensions, a union spokesman said.

            But among workers in the bakers union, it was "standard practice," said Mr. Rayburn, Hostess's CEO.

          •  Ambiguous. (1+ / 0-)
            Recommended by:

            When people talk about "their wages," they're talking about total comp: wages, contributions made by employer, etc.  And everything that you're saying is consistent w/ that and consistent with the notion that the pot of money we're talking about here is the employer contribution portion.

            And, from an ethical standpoint, it probably doesn't matter whether these were employee contributions or employer contributions, but it does matter for whether the judge acted reasonably and correctly in discharging pension contributions owed.

            If these were employer contributions, then it's just another unsecured obligation of the bankruptcy estate (w/ some priority for contributions up to a certain amount per employee, IIRC), but if it's money that was literally stolen, then it would probably be a different ball of wax altogether.

            •  Found a newsletter from a law firm on exactly (1+ / 0-)
              Recommended by:

              this ambiguity:

              Last week various media outlets throughout the country reported that the Hostess Brands Inc. (“Hostess”) CEO told a Wall Street Journal reporter that Hostess used funds “earmarked” for contributions to multiemployer pension plans to fund its Chapter 11 bankruptcy expenses.  Some sources even indicated that these amounts were withheld from employees’ paychecks.  Such allegations, if true, would expose Hostess executives to severe civil liability and potentially even criminal charges under ERISA for misuse of “plan assets.”

              Hostess later clarified that amounts withheld from employees’ paychecks were not involved.  Hostess further stated it paid its contributions to the multiemployer plans in accordance with the collective-bargaining agreements and that the plans may make a
              claim as a general unsecured creditor on the bankrupt company’s assets to the extent permitted by federal bankruptcy law.  

              Whether Hostess used any “plan assets” to fund company operations is still not completely clear because the determination of whether the “earmarked” assets are “plan assets” under ERISA may depend on the terms of the collective-bargaining agreements and the timing of missed payments, if any.  

            •  Ambiguous is their goal. It worked on you! (3+ / 0-)
              Recommended by:
              Noddy, Puddytat, radical simplicity

              There is nothing ambiguous about the WSJ article. The CEO directly acknowledges these facts, over a year after the letter was sent to us.

              The $4.25 an hour is the direct result of the Bakers voting to contribute from our hourly rate to the pension. For example, if we got a raise in the past of $.35 an hour we would vote to put $.32 towards pension fund and $.03 towards hourly. We could have voted the entire $4.25 an hour onto our checks if we wanted but CHOSE the pension instead.

              Also, the company hasn't contributed their portion of the pension since the first bankruptcy. All we had left was the $4.25 an hour that WE CONTRIBUTED.

              I am sorry that you were unaware of the mountain of evidence out there.

              •  you didn't contribute that. (1+ / 0-)
                Recommended by:

                you never owned those wages, they were to be contributed on your behalf by the company.

                kind of a reckless decision by the pension to agree to be a creditor of a company that had gone in and out of bankruptcy.  I'm startled they didn't demand some sort of security.

                •  the part I meant to stress there is that (1+ / 0-)
                  Recommended by:

                  you didn't get additional wages from those raises; rather, you sacrificed wage income for unsecured promises to pay to a pension fund.  you got something, just not wages in the legal sense

                •  You don't get it. (5+ / 0-)

                  We absolutely owned those wages.

                  The Union negotiates our wages, including pension, and the company pays our wages, including pension. By your description we don't even own the wages we actually received.

                  What does this mean
                  "decision by the pension to agree to be a creditor"

                  The pension is a third party not ran by the Union or the company. They never agreed to be a creditor in any way for anyone. They simply manage the pension fund, without interference from the Union or company. If the company doesn't send the check then we are out of the pension.

                  When the company stopped sending the $4.25 an hour to the pension they did not start putting the $4.25 an hour on our checks. So where is it? It is ours, its the raises WE voted to put on the pension. If we had voted to keep it on our hourly it would still be there.

                  This is not as complicated as you want it to be.

              •  He's a troll (0+ / 0-)

                Look at his comment history, and just feed him a recipe whenever he pops up.

                •  But not in the usual sense (0+ / 0-)

                  This guy's certainly not adverse to stirring things up -- but I don't think that's his objective, for what it's worth. He thinks he's educating people, which obviously is impossible when he doesn't have the facts.

                  You see this behavior with certain lawyers. They're so confident in themselves that they presume themselves to be authorities in matters outside of their area of expertise. All this does is needlessly stir up trouble and make them look foolish.

                  •  He's been very consistent for years (0+ / 0-)

                    I have a policy of not engaging, because he spouts right wing talking points as pretty much his entire repertoire. In egregious cases, I figure I provide a recipe and let the real discussion continue without the intended diversion. But mostly I don't bother responding to the bait. He's very good at it, but civil enough (usually) that people don't troll-rate him out of existence.

  •  Republished to (2+ / 0-)

    In Support of Labor and Unions.

    Added some tags, as well (feel free to remove them).

    I'm retired, but my grandfather worked for Hostess (he passed away in 1970). That was back in the days when workers and their unions were respected.  There was an understanding that workers made their companies profitable and hard work was to be rewarded.

    This was what made corporations profitable - they hired workers, paid them a decent salary, and the workers did the work that created profits.

    Today, not so much.  Employers now think workers are expendable, work hard to lower their wages and take away their benefits, and treat them miserably.  Workers, because of the lack of jobs through outsourcing, fear job loss.

    This must stop.

    There already is class warfare in America. Unfortunately, the rich are winning.

    by Puddytat on Thu Jan 17, 2013 at 01:34:53 PM PST

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