If the company is liquidated WE could get stuck for the diminished pensions, by poor management, lying moron....
Ryan Nicholson for The Wall Street Journal
Hostess Brands Inc. said it used wages that were supposed to help fund employee pensions for the company's operations as it sank toward bankruptcy.
After nearly 22 years at Hostess, former forklift operator Craig Davis is pondering his future on the front porch of his home in Emporia, Kan.
It isn't clear how many of the Irving, Texas, company's workers were affected by the move or how much money never wound up in their pension plans as promised.
After the company said in August 2011 that it would stop making pension contributions, the foregone wages weren't put toward the pension. Nor were they restored.
The maker of Twinkies, Ho-Hos and Wonder Bread filed for bankruptcy protection in January and shut down last month following a strike by one of the unions representing Hostess workers. A judge is overseeing the sale of company assets.
Gregory Rayburn, Hostess's chief executive officer, said in an interview it is "terrible" that employee wages earmarked for the pension were steered elsewhere by the company.
"I think it's like a lot of things in this case," he added. "It's not a good situation to have."
Mr. Rayburn became chief executive in March and learned about the issue shortly before the company shut down, he said. "Whatever the circumstances were, whatever those decisions were, I wasn't there," he said.
A spokeswoman for Hostess's previous top executive, Brian Driscoll, declined to comment.
Hostess hasn't previously acknowledged that the foregone wages went toward its operations.
The maneuver probably doesn't violate federal law because the money Hostess failed to put into the pension didn't come directly from employees, experts said.