Last month the drama surrounding Hostess’s efforts to reject various collective bargaining agreements drew to a close (pending appeal). Bankruptcy Judge Robert Drain (in an unpublished decision) authorized Hostess to reject its existing CBAs with affiliates of the Bakery, Confectionery, Tobacco and Grain Workers International Union, and modify the terms of its expired CBAs with the Bakers’ Union on an interim basis. The Bakers Union was the last of Hostess’s major unions holding out and refusing to accept modifications to its CBAs. See Transcript of Hearing, In re Hostess Brands, Inc., No. 12-22052 (RDD) (Bankr. S.D.N.Y. Oct 3, 2012). This decision resolves an open question that arose in May when Judge Drain held that debtors could not reject expired CBAs on a final basis pursuant to section 1113(c) of the Bankruptcy Code but might be allowed to reject such CBAs on an interim basis pursuant to section 1113(e). Cadwalader reviewed the hearing transcript to analyze the opinion. Continue reading
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