Former Hostess case to be dismissed following completion of conditions

By Caroline Salls

Pittsburgh, Dec. 1 – The Chapter 11 cases of Old HB, Inc., formerly Hostess Brands, Inc., will be dismissed upon satisfaction of conditions set by the U.S. Bankruptcy Court for the Southern District of New York, according to an order filed Monday.

According to Monday’s dismissal order, Old HB must file with the court a certificate of completion of the conditions precedent to the dismissal of the cases, including the closing of the transaction under which the company is transferring its remaining assets, the entry of a final fee applications order and the payment of those fees, the filing of appropriate requests with state governmental authorities seeking to merge with one another and dissolve their corporate existence, the payment of all U.S. Trustee fees, payment to post-winddown administrative claimants and the distribution of remaining cash to the asset purchasers.

The cases will be deemed dismissed one day after the certification is filed.

As previously reported, the company said it negotiated an asset purchase agreement under which Ostess LLC and Ostess Services LLC, entities created for the benefit of holders of Old HB’s 2019 notes, will buy the remaining assets via a credit bid.

That agreement was approved last month.

Old HB said it has paid all secured debt obligations that are entitled by law to payment before the 2019 noteholders, and all claims that give rise to statutory liens, including mechanics liens, possessory liens and property tax liens, have been paid in full with no further amounts outstanding.

The company said at least $156.6 million in principal amount remains outstanding under the 2019 notes, exceeding “any reasonable estimation of the value of the remaining assets.”

According to the motion, there will be no further assets to administer after the transfer of the remaining assets, meaning there will be no prospect of payment of unsecured claims and no chance of confirming a Chapter 11 plan.

As a result, the company said the cases should be dismissed and Old HB’s corporate existence should be dissolved.

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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