Both sides agreed to try to work through the conflict. Meanwhile, possible suitors wait in case negotiations for the maker of Twinkies and Ding Dongs fail.

By Tiffany Hsu, Los Angeles Times
November 20, 2012

Twinkies may live on after all.

Bankrupt Hostess Brands Inc. and its striking union agreed to enter into mediation to try to resolve their differences, putting the baking company’s planned liquidation on hold for now.

At a U.S. Bankruptcy Court hearing Monday in White Plains, N.Y., the 82-year-old company sought permission to start shutting down its business. Instead, Judge Robert Drain urged Hostess and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union to consider mediation.

Both sides agreed to try to work through the conflict, which could preserve more than 18,000 jobs. Those include 550 positions for workers at two bakeries and seven retail stores in Los Angeles and Orange counties, as of the start of the year.

Altogether, Hostess has 565 distribution centers around the country, as well as 33 bakeries and 570 bakery outlets.

Quiz: The week in business

Mediation hearings will begin Tuesday, but the original hearing to consider the wind-down plan was adjourned until Wednesday morning, just in case reconciliation talks don’t work out. Production “remains shut down,” according to the Irving, Texas, company.

But the scales are out of balance, with the union at a deep disadvantage, said Gene Grabowski, a Washington crisis communications expert at consulting firm Levick.

If discussions fail, Hostess probably will sell itself at a loss and wash its hands of the situation, Levick said. Buyers — potentially major food companies such as ConAgra Foods Inc., Kraft Foods Inc. or Nestle — then probably would absorb the brands into their operations without hiring former Hostess workers.

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