Former Hostess to settle injury-related claim with $21 million payment

By Kali Hays

New York, Sept. 25 – Old HB, Inc., formerly Hostess Brands, Inc., obtained approval of a $21 million settlement agreement resolving the claims of Michael Sprick, according to a Thursday order with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, in May 2012, Sprick filed a general unsecured claim of $50 million against Old HB after a company-owned vehicle was involved in an accident with Sprick on his bicycle in Germany.

The accident left Sprick with significant injuries and forced him to reside in a permanent care facility.

Under the settlement, Sprick agreed to release any claims against the company related to the accident and Old HB agreed to a payment of $21 million in either a single lump sum or multiple lump sums plus the value of a stream of periodic payments, according to the motion.

The settlement received conditional approval from the U.S. District Court for the Western District of Virginia in July, but the effectiveness of the agreement is still conditioned upon approval by a court of “competent jurisdiction” in Germany along with final approval by the District Court.

Old HB said the settlement will not require any “out-of-pocket” expenses as the company’s multiple automobile liability insurance policies will cover the settlement amount.

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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