Former Hostess looks to settle $1.8 million claim against Wal-Mart

By Kali Hays

New York, July 23 – Old HB, Inc., formerly Hostess Brands Inc., is seeking court approval of a settlement agreement resolving a $1.8 million claim against Wal-Mart Stores, Inc., according to a July 22 filing with the U.S. Bankruptcy Court for the Southern District of New York.

Old HB’s claim is a result of what Wal-Mart claimed to be unsellable or “stale” product supplied by Hostess in 2012 after an agreement was reached by the parties for Wal-Mart to purchase substantially all of Hostess’ remaining product for $11.6 million.

After delivery of the product, Wal-Mart paid Hostess $9.8 million, but said the remaining balance of $1.8 million was not due or owing, as received product in that amount was past its “sell by” date and had been immediately discarded.

While Old HB said it does not agree with Wal-Mart’s position, it has “concerns about the time, effort, expense and risks of litigating the issues.”

Under the settlement, Wal-Mart has agreed to pay Old HB $30,000 and both parties will release claims between them.

A hearing is set for Aug. 5.

Hostess Brands, an Irving, Texas-based operator of regional bakeries, filed for bankruptcy on Jan. 11, 2012. Its Chapter 11 case number is 12-22052.

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