Apparently the U.S. Trustee's Office, which oversees bankruptcy cases, is taking issue with that. If Hostess is forced into Ch. 7, there will be much more government oversight over how they wind down the business.
The U.S. trustee in the bankruptcy of Hostess Brands Inc. asked a judge to take control of the company’s liquidation away from the baker of Twinkies and Wonder bread.
U.S. Trustee Tracy Hope Davis today urged U.S. Bankruptcy Judge Robert D. Drain in White Plains, New York, to convert the case to a Chapter 7 from Chapter 11, based partly on the company’s intent to pay executive bonuses.
Hostess officials “have not demonstrated that the insider bonuses are permissible,” Davis wrote in a court filing.
