Hostess bankruptcy teaches lessons to Minnesota business owners

When consumers heard of Hostess Brands bankruptcy filing, many could not believe it. Many were shocked to hear the maker and distributor of such popular products as Twinkie and Ding-Dongs was going out of business.

However, as many consumers have now realized, this bankruptcy filing was not necessarily the end of their beloved products, as Twinkies are now back on the store shelves.

Twinkies and other snack cakes were bought out by Apollo Global management and Metropoulos & Co. These two private equity firms have a reputation for helping to build up struggling brands.

For the average consumer, they may have also noticed that Twinkies are now slightly smaller in size. However, this change actually stems from a decision that was made before the company filed for bankruptcy. Now, instead of being 150 calories a cake and weighing 42.5 grams, Twinkies are now 135 calories per cake and weigh 38.5 grams.

For business owners in Minnesota though, new size aside, the case of Twinkies can teach a lesson.

For example, while many at one point may have thought there were no financial issues with the maker of Twinkies, the company's bankruptcy filing proved otherwise. And while the product itself was still very marketable, the best thing for the company to do was to file for bankruptcy.

For business owners in Minnesota, filing for bankruptcy can be scary. Many become emotionally invested, viewing the financial struggles of the business as their own personal failings. However, the truth is that there are plenty of businesses that have struggled and have filed for bankruptcy. Especially with the downturn in the economy, many small businesses in the state have not been able to survive.

Depending on the situation, a business bankruptcy can be taken as a sign to step away from owning a business or it can be viewed at as a learning opportunity for what to avoid in the future. Either way though, regardless of what future plans hold, bankruptcy is certainly one way many businesses in Minnesota have wiped the debt slate clean.

Source: Associated Press, "'New' Twinkies weigh less, have fewer calories," Candace Choi, July 15, 2013

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