CHICAGO (AFP) - Interstate Bakeries Corp., the maker of some of America's most popular snacks, filed for bankruptcy earlier, burdened by 1.3 billion dollars in debt.
The bakery said it had run into a liquidity crisis, because of high fixed costs, excess industry capacity and higher costs for ingredients and energy.
With 3.5 billion dollars in annual sales, Interstate is the largest US wholesale baker, and some of its brands -- Twinkies, Hostess Cakes -- are household names.
Twinkies -- a spongy cake filled with cream, loaded with "trans fats," which raises levels of bad cholesterol, and packs about 160 calories per cake -- dates back to the 1930s.
But the baker, like many other in the sector, has seen its sales slip as carb-conscious US consumers turn their back on pastries, cakes and bread as they battle to lose weight.
The Kansas City, Missouri, company said it will continue to operate under the protection of bankruptcy court, and has already lined up a 200 million-dollar asset-backed loan from JP Morgan Chase Bank to fund continuing operations.
A spokeswoman said it will undoubtedly have to trim its payroll: it employs approximately 32,000 staff at 54 bakeries, 1,000 distribution centers and 1,200 thrift stores.
Two executives with experience of turning around struggling corporations have taken over from James Elsesser, the company's former chairman and CEO, who resigned both positions Wednesday.
Tony Alvarez has been appointed chief executive officer and John Suckow as chief restructuring officer.
Shares in Interstate were trading down 1.22 or 37 percent at 2.05 dollars just before the end of the trading day.