Judge to let Hostess liquidation proceed

Hostess Brands Inc. on Wednesday won permission from a U.S. bankruptcy judge to begin shutting down, and expressed optimism it will find new homes for many of its iconic brands, which include Twinkies, Drake's cakes and Wonder Bread.

U.S. Bankruptcy Judge Robert Drain in White Plains, New York authorized management, led by restructuring specialist Gregory Rayburn, to immediately begin efforts to wind down the 82-year-old company, a process expected to take one year.

"It appears clear to me that the debtors have taken the right course in seeking to implement the wind-down plan as promptly as possible," Drain said near the end of a four-hour hearing.

The judge authorized Hostess to begin the liquidation process one day after his last-ditch mediation effort between the Irving, Texas-based company and its striking bakers' union broke down.

Roughly 15,000 workers were expected to lose their jobs immediately, and most of the remaining 3,200 would be let go within four months.

"This is a tragedy, and we're well aware of it," Heather Lennox, a lawyer for Hostess, told the judge. "We are trying to be as sensitive as we can possibly be under the circumstances to the human cost of this."

Lennox said Hostess has received a "flood of inquiries" from potential buyers for several brands that could be sold at auction, and expects initial bidders within a few weeks.

Joshua Scherer, a partner at Perella Weinberg Partners, which is advising Hostess, said the company was in "active dialogue" over its Drake's brand with one "very interested" party that had toured a New Jersey plant on Tuesday.

He said that regional bakeries, national rivals, private equity firms and others have also expressed interest in various brands and that more than 50 nondisclosure agreements have been signed.

"These are iconic brands that people love," Scherer said.

While prospective buyers were not identified at the hearing, bankers have said rivals including Flowers Foods Inc. and Mexico's Grupo Bimbo SAB de CV were likely to be interested in some of the brands.

Representatives of neither company responded on Wednesday to requests for comment.

Scherer said Hostess could be worth $2.3 billion to $2.4 billion in a normal bankruptcy, an amount equal to its annual revenue. It also has about $900 million of secured debt and faces up to about $150 million of administrative claims.

Scherer expects a discount in this case because plants have already been closed and Hostess' value could fall further if the liquidation were dragged out.

"I've had buyers tell me, 'Josh, the longer it takes, the less value I'm going to be able to pay you,' " he said.

Hostess decided to liquidate on Nov. 16, saying it was losing about $1 million per day after the Bakery, Confectionery, Tobacco and Grain Millers Union, representing close to one-third of its workers, went on strike a week earlier.

The bakers union walked out after Drain authorized Hostess to impose pay and benefit cuts, which the International Brotherhood of Teamsters, Hostess' largest union, had accepted.

Hostess has about 33 plants, plus three it decided to close after the strike began, as well as 565 distribution centers and 570 bakery outlet stores.

Many of the 3,200 workers expected to stay on will help shut these properties and prepare them for sale. Hostess expects to need only about 200 employees by late March.

Rayburn, a former chief restructuring officer for the bankrupt phone company WorldCom Inc., said that letting 15,000 workers go now helps preserve their ability to obtain unemployment benefits.

"I need to maximize the value of the estate, but I need to do the best I can for my employees," he said.

Hostess filed for Chapter 11 protection on Jan. 11, its second bankruptcy filing in less than three years.

The case is In re: Hostess Brands Inc. et al, U.S. Bankruptcy Court, Southern District of New York, No. 12-22052.

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Bartender wounded in hotel stabbing: 'It was bone-chilling'

Bartender Bradford Burner didn't stop to think when he heard someone screaming and saw a man race through the Westin Hotel and into the streets of the Gold Coast still crowded from the Festival of Lights.

"The way the person screamed, 'Stop that person!' It was bone-chilling," said Burner, 35, speaking for the first time about a botched robbery and stabbing on the Mag Mile this past weekend. "I just reacted."

As Burner closed in near some shops at the Hancock building, the man turned toward Burner with a knife in his hand.

"Someone yelled something, the gentleman turned around (and) saw me coming towards him," Burner told Chicago Tribune columnist John Kass on WLS-890 AM. "The next thing I know, he was lunging at me with a sharp object."

Burner was cut on the left side of his chest and fell to the ground.

"I was like, 'What the hell just happened?' " Burner told the Tribune after his radio interview.

The fleeing man ran across the street and slowed down, trying to blend in among the families strolling along North Michigan Avenue.

"I looked right over at him. He paused for two seconds and looked directly back at me, and then he proceeded down the steps," Burner said during the radio interview. "His demeanor was that of a person trying to get away. ... Sacrifice everything to get away from the situation."

Burner remembers parents and their small children staring down at him as he lay bleeding. He decided not to wait for an ambulance and hailed a cab.  He hopped in and asked, "What was the fastest he could get me to Northwestern Hospital?"

"The taxi driver was freaked out," Burner said. "He was like, 'Are you crazy?' I said, 'I'm really serious about this,' " Burner said, showing the cabbie the bloody side of his shirt and vest.

Burner said he tipped the driver before going inside for stitches, though he can't remember how much it was.

As Burner rode to the hospital, police arrested Jimmy Harris, 56, a parolee with with 60 arrests who had been freed from prison just eight days earlier, authorities said.

Harris had tried to rob an Oak Brook doctor, Mir Jafar Shah, in the restroom of the Westin and stabbed him during a scuffle, then fled out of the hotel, according to police. Shah and his family had been dining after attending the lights festival.

Burner bristled at being called a hero.

"My heart goes out to (Shah) and their whole family that they had to go through this tragedy," Burner said on the radio. "I don't see it as me being a hero. I was just trying to stop an individual that was doing something wrong."

Tribune reporter Jason Meisner contributed.

wlee@tribune.com

Twitter: @MidnoirCowboy

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HP alleges Autonomy wrongdoing, takes $8.8 billion charge

(Reuters) - Hewlett-Packard stunned Wall Street by alleging a massive accounting scandal at its British software unit Autonomy that will cost the company the majority of $8.8 billion in charges.

It was the latest in a string of reversals that have renewed questions about the basic competence of the storied company's board and senior managers.

HP said on Tuesday it discovered "serious accounting improprieties" and "a willful effort by Autonomy to mislead shareholders," after a whistleblower came forward following the ouster of Autonomy's then-chief executive, Mike Lynch, in May.

The charge follows a nearly $11 billion writedown last quarter for the company's EDS services division.

The technology company has been roiled in the past few years by a revolving door of CEOs, overall management turnover and challenges in its core personal computer and printer businesses.

HP's stock slid to a 10-year low, dropping 12 percent to $11.71 in regular trading on Tuesday. Shares are down nearly 50 percent year to date.

Lynch "flatly rejected" HP's allegations and said he was "shocked" but confident he would be absolved of any wrongdoing.

He had not been notified by HP about the allegation before it was made public, nor had he been contacted by any authorities, Lynch said in an interview with Reuters.

HP took $8.8 billion in charges in the quarter, with $5 billion tied to the problems at Autonomy. The rest of the charge related to the "recent trading value of HP stock and headwinds against anticipated synergies and marketplace performance," HP said.

HP said it has referred the matter to the U.S. Securities and Exchange Commission's enforcement division and the UK's Serious Fraud Office for civil and criminal investigation. It said it would take legal action to recoup "what we can for our shareholders."

Both agencies declined to comment.

HP Chief Executive Meg Whitman, who voted for the deal while she was on HP's board, said the investigation of Autonomy's finances - both external and internal - will take multiple years as it makes it way through the courts in both countries.

"Most of the board was here and voted for this deal, and we feel terribly about that," said Whitman on a call with analysts. "The board relied on audited financials, audited by Deloitte. Not Brand X accounting firm, but Deloitte," she said, adding that KPMG was hired to audit Deloitte.

"Neither of them saw what we now see after someone came forward to point us in the right direction," Whitman said.

INFLATED SALES, REVENUE

HP alleged that Autonomy's former management inflated revenue and gross margins to mislead potential buyers. It said Autonomy executives mischaracterized revenue from low-end hardware sales as software sales and booked some licensing deals with partners as revenue, even though no customer bought products.

HP said Autonomy claimed its gross margins were in the 40 percent to 45 percent range while realistically they were in the 28 percent to 30 percent range.

Moreover, Autonomy always represented itself as a software firm but 10 percent to 15 percent of its revenue came from money-losing sales of low-end hardware, HP said.

The company also claimed that Autonomy was booking licensing revenue upfront before deals closed.

HP has embarked on an internal investigation, including a forensic review by PricewaterhouseCoopers of Autonomy's historical financial results, under HP General Counsel John Schultz after the whistleblower came forward in May.

Schultz said since the accounting troubles occurred prior to the acquisition of Autonomy, it took a long time before HP was in a position to make the news public.

"Not surprisingly, Autonomy did not have sitting on a shelf somewhere a set of well-maintained books that would walk you through what was actually happening from a financial perspective inside the company," he said. "Indeed critical documents were missing from the obvious places, and it required that we look in every nook and cranny."

Whitman said her predecessor, Leo Apotheker and the former chief strategy officer, Shane Robison, were the key people behind the Autonomy acquisition.

Apotheker bought Autonomy to diversify HP's business and beef up its portfolio to provide one-stop shopping for corporations. The $11 billion acquisition of Autonomy - heavily criticized by investors as too costly - was a key part of the plan to transform HP.

Apotheker was ousted as CEO in September 2011 after just 11 months on the job and Robison left soon after.

In a statement, Apotheker said he was "stunned and disappointed" by the revelations and offered to make himself available to HP and the authorities to get to the bottom of the matter.

Whitman on Tuesday stood by Autonomy's technology and products despite the allegations, saying it will be the growth engine for HP. The former California gubernatorial candidate has been trying to move beyond some of HP's past controversies, which includes the ouster of the past two CEOs, a haphazard product strategy and a plan to sell its PC unit that was later dropped.

HP has been running Autonomy since the acquisition closed in October 2011, but it didn't find the accounting problems on its own. The company investigated only after a senior Autonomy executive came forward to detail the financial metrics surrounding Autonomy.

Advisers working on behalf of Autonomy included Qatalyst Partners, the investment bank run by technology investment banker Frank Quattrone; UBS; Goldman Sachs; Citigroup; JPMorgan Chase, and Bank of America. Perella Weinberg Partners and Barclays Capital advised for HP.

Law firms for Autonomy were Slaughter & May and Morgan Lewis. The firms for HP included Gibson, Dunn & Crutcher; Freshfields Bruckhaus Deringer; Drinker Biddle & Reath; and Skadden, Arps, Slate, Meagher & Flom.

Robert Enderle, a tech analyst at the Enderle Group, said he has never seen such a potential misrepresentation of financials.

"You have to rely on what the firm gives you during due diligence and I've never seen a misstatement at this level," Enderle said.

If the charges are true, it could result in a massive punitive damages award for HP, Enderle said.

Other analysts hoped it was the end of the bad news for HP.

"This kind of feels like the last of the bad news," Forrester analyst Frank Gillett said.

FOURTH-QUARTER LOSS

The Autonomy allegations and announcement of the charge coincided with the reporting of a fiscal fourth-quarter loss for HP.

HP said net revenue fell 6.7 percent to $29.96 billion for the quarter, ended October 31, from $32.12 billion a year earlier. Analysts, on average, expected $30.43 billion, according to Thomson Reuters I/B/E/S.

Revenue from all of its main business units declined, with the personal computer division recording the steepest drop, at 14 percent while revenue from printing fell 5 percent.

HP reported a quarterly net loss of $6.85 billion, or $3.49 a share, versus a profit of $239 million, or 12 cents, a year earlier.

The sprawling company, which employs more than 300,000 people globally, is undergoing a restructuring aimed at focusing on enterprise services in the mold of International Business Machines Corp.

"To put it bluntly ... this story has been an unmitigated train wreck, and it seems every time management speaks to the Street, there is new negative incremental information forthcoming," said ISI Group analyst Brian Marshall.

(Reporting by Poornima Gupta in San Francisco, Nicola Leske in New York and Supantha Mukherjee in Bangalore; Additional reporting by Paul Sandle; Editing by Peter Lauria, Saumyadeb Chakrabarty, Jeffrey Benkoe and Steve Orlofsky)

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Rutgers joins the Big Ten, leaving Big East behind

PISCATAWAY, N.J. (AP) — As the Big East was being picked apart, Rutgers was looking for a way out and a new place to show off a football program that has been resurrected in the past decade.

Not only did Rutgers find that escape hatch, the Scarlet Knights ended up in one of the most desirable neighborhoods in college sports.

Rutgers joined the Big Ten on Tuesday, leaving the Big East behind and cashing in on the school's investment in a football team that only 10 years ago seemed incapable of competing at the highest level.

The move follows Maryland's announcement a day earlier that it was heading to the Big Ten in 2014. The additions give the Big Ten 14 schools and a presence in lucrative East Coast markets.

Rutgers announced its decision Tuesday at a campus news conference attended by Big Ten Commissioner Jim Delany, Rutgers President Robert Barchi and athletic director Tim Pernetti.

"The Big Ten is really where Rutgers belongs," Barchi said. "This is not just a good fit for us athletically, it's a good fit for us academically and as an institution."

Rutgers has been competing in the Big East since 1991. But the league has been torn up by conference realignment, losing three key members last year.

Pernetti had insisted all along that Rutgers would land on its feet, that being a member of the prestigious American Association of Universities and residing in the largest media market in the country would ensure the school wouldn't be cast aside as the landscape of college sports changed.

The Scarlet Knights landed in the best possible spot. A spot that seemed unthinkable a decade ago when Rutgers football was a Big East cellar-dweller.

"It's a transformative day for Rutgers University, and transformative in so many ways," Pernetti said. "This is about collaboration at every level, the perspective the Big Ten institutions have, the balance between academics and athletics, proving over decades and decades that athletics at the highest level and academics at the highest level can coexist. It's the perfect place for Rutgers."

Rutgers left its entry date ambiguous, though clearly the Big Ten and the school would like it to line up with Maryland.

The Big East requires 27 months' notification for departing members. The Scarlet Knights will have to negotiate a deal with the Big East to leave early, the way Pittsburgh, Syracuse and West Virginia have done.

"Although we are disappointed that Rutgers has decided to leave the Big East Conference, we wish them well," Big East Commissioner Mike Aresco said in a statement.

In an interview later, Aresco said that the conference would survive. "We'll move judiciously to replace Rutgers, but we had already changed from the small, Northeast model," he said. "We're a national conference now. We became a bigger and better football conference."

The Big East is trying to rebuild itself as a 12-team football league next season, with the addition of Boise State and five other schools. Now the conference is again on the defensive. Connecticut or Louisville could be next to go with the ACC looking to replace Maryland.

Aresco said he had been in touch with the newcomers and they were still on board. He declined to speculate on other members leaving.

Whenever Rutgers enters the Big Ten, it will be the culmination of one of the most remarkable turnarounds in college sports.

In 2002, the Scarlet Knights football team went 1-11 under second-year coach Greg Schiano.

The team, however, steadily improved as the university made the huge financial commitment necessary to support major college football.

Facilities were upgraded, the on-campus stadium was expanded and as Schiano started to win, his salary began to rise into the millions. Not everyone on campus embraced the idea of turning Rutgers into a big-time football school, and it did come with a price.

The expanded and renovated stadium cost of $102 million. The school had hoped to raise the money through private donors, but fell short. Rutgers scaled back plans for the expansion and issued bonds and borrowed money to complete the project.

In 2006, the school had to cut six varsity sports. As the football team has become a consistent winner — Rutgers has gone to a bowl six of the last seven years — the athletic department has received tens of millions in subsidies from the university.

Schiano left for the NFL last year, and Rutgers hired longtime assistant Kyle Flood, who has the Scarlet Knights poised to take make another big step. No. 21 Rutgers (9-1) is in position to win its first Big East championship and go to a BCS game for the first time.

In the Big Ten, the revenue Rutgers receives from the league's television and media deals should triple in the short term and could be even more than that in years to come.

The Big Ten reportedly paid its members about $24 million last year, though new members generally do not get a full share of revenue immediately. The Big East's payout to football members last year was $6 million.

In exchange, the Big Ten gets a member in the largest media market in the country, with Rutgers and Maryland as north and south bookends.

"You know, it was a factor," Delany said, referring to the New York television market. "I think it's been a factor that's been a little overplayed to be honest with you."

Losing access to that market is yet another blow to the Big East. The conference is again facing an uncertain future and at the worst possible time. The Big East is trying to negotiate a crucial new television contract.

With the Big East on shaky ground, there has been speculation that Boise State and San Diego State could renege on their commitments to the Big East and stay in the Mountain West.

San Diego State AD Jim Sterk told the North County Times that the Aztecs are not looking to bail.

"It's not great to lose UConn or Rutgers, but if that happens, it gives us an opportunity to have less travel in the Western division," Sterk told the newspaper. "We pick up someone further west, and we're in better shape than yesterday's Big East."

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Follow Ralph D. Russo at www.Twitter.com/ralphdrussoap

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OB/GYNs back over-the-counter birth control pills

WASHINGTON (AP) — No prescription or doctor's exam needed: The nation's largest group of obstetricians and gynecologists says birth control pills should be sold over the counter, like condoms.

Tuesday's surprise opinion from these gatekeepers of contraception could boost longtime efforts by women's advocates to make the pill more accessible.

But no one expects the pill to be sold without a prescription any time soon: A company would have to seek government permission first, and it's not clear if any are considering it. Plus there are big questions about what such a move would mean for many women's wallets if it were no longer covered by insurance.

Still, momentum may be building.

Already, anyone 17 or older doesn't need to see a doctor before buying the morning-after pill — a higher-dose version of regular birth control that can prevent pregnancy if taken shortly after unprotected sex. Earlier this year, the Food and Drug Administration held a meeting to gather ideas about how to sell regular oral contraceptives without a prescription, too.

Now the influential American College of Obstetricians and Gynecologists is declaring it's safe to sell the pill that way.

Wait, why would doctors who make money from women's yearly visits for a birth-control prescription advocate giving that up?

Half of the nation's pregnancies every year are unintended, a rate that hasn't changed in 20 years — and easier access to birth control pills could help, said Dr. Kavita Nanda, an OB/GYN who co-authored the opinion for the doctors group.

"It's unfortunate that in this country where we have all these contraceptive methods available, unintended pregnancy is still a major public health problem," said Nanda, a scientist with the North Carolina nonprofit FHI 360, formerly known as Family Health International.

Many women have trouble affording a doctor's visit, or getting an appointment in time when their pills are running low — which can lead to skipped doses, Nanda added.

If the pill didn't require a prescription, women could "pick it up in the middle of the night if they run out," she said. "It removes those types of barriers."

Tuesday, the FDA said it was willing to meet with any company interested in making the pill nonprescription, to discuss what if any studies would be needed.

Then there's the price question. The Obama administration's new health care law requires FDA-approved contraceptives to be available without copays for women enrolled in most workplace health plans.

If the pill were sold without a prescription, it wouldn't be covered under that provision, just as condoms aren't, said Health and Human Services spokesman Tait Sye.

ACOG's opinion, published in the journal Obstetrics & Gynecology, says any move toward making the pill nonprescription should address that cost issue. Not all women are eligible for the free birth control provision, it noted, citing a recent survey that found young women and the uninsured pay an average of $16 per month's supply.

The doctors group made clear that:

—Birth control pills are very safe. Blood clots, the main serious side effect, happen very rarely, and are a bigger threat during pregnancy and right after giving birth.

—Women can easily tell if they have risk factors, such as smoking or having a previous clot, and should avoid the pill.

—Other over-the-counter drugs are sold despite rare but serious side effects, such as stomach bleeding from aspirin and liver damage from acetaminophen.

—And there's no need for a Pap smear or pelvic exam before using birth control pills. But women should be told to continue getting check-ups as needed, or if they'd like to discuss other forms of birth control such as implantable contraceptives that do require a physician's involvement.

The group didn't address teen use of contraception. Despite protests from reproductive health specialists, current U.S. policy requires girls younger than 17 to produce a prescription for the morning-after pill, meaning pharmacists must check customers' ages. Presumably regular birth control pills would be treated the same way.

Prescription-only oral contraceptives have long been the rule in the U.S., Canada, Western Europe, Australia and a few other places, but many countries don't require a prescription.

Switching isn't a new idea. In Washington state a few years ago, a pilot project concluded that pharmacists successfully supplied women with a variety of hormonal contraceptives, including birth control pills, without a doctor's involvement. The question was how to pay for it.

Some pharmacies in parts of London have a similar project under way, and a recent report from that country's health officials concluded the program is working well enough that it should be expanded.

And in El Paso, Texas, researchers studied 500 women who regularly crossed the border into Mexico to buy birth control pills, where some U.S. brands sell over the counter for a few dollars a pack. Over nine months, the women who bought in Mexico stuck with their contraception better than another 500 women who received the pill from public clinics in El Paso, possibly because the clinic users had to wait for appointments, said Dr. Dan Grossman of the University of California, San Francisco, and the nonprofit research group Ibis Reproductive Health.

"Being able to easily get the pill when you need it makes a difference," he said.

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Online:

OB/GYN group: http://www.acog.org

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Ex-'Price is Right' model wins suit against show

LOS ANGELES (AP) — A Los Angeles jury says a former model on "The Price is Right" was discriminated against by producers because of her pregnancy.

The Superior Court jury awarded $776,944 to Brandi Cochran on Tuesday after deliberations that began last week.

City News Service reports that a second phase of the trial will determine whether Cochran should be awarded punitive damages.

The 41-year-old Cochran is a former Miss USA. She claimed she was rejected by producers when she tried to rejoin "The Price is Right" in 2010 after taking maternity leave.

FremantleMedia North America, one of the producers named in the suit, blamed the verdict on a "flawed process." It says that key evidence was excluded by the court.

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Hostess, unions agree to mediation

Hostess Brands Inc agreed in court on Monday to enter private mediation with its lenders and leaders of a striking union to try to avert the liquidation of the maker of Twinkies snack cakes and Wonder Bread.

Hostess, its lenders and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union agreed to mediation at the urging of Bankruptcy Judge Robert Drain of the Southern District of New York, who advised against a more expensive, public hearing regarding the company's liquidation.

"My desire to do this is prompted primarily by the potential loss of over 18,000 jobs as well as my belief that there is a possibility to resolve this matter," Drain said.

The 82-year-old Hostess was seeking permission to liquidate its business, claiming that its operations have been crippled by a bakers strike and that winding down is the best way to preserve its dwindling cash. Hostess suspended operations at all of its 33 plants across the United States last week as it moved to start selling assets.

Heather Lennox, a lawyer for Hostess, said it would be hard for Hostess to recover from the damage it sustained due to the strike even if an agreement was forthcoming. Yet following the hearing, Hostess Chief Executive Officer Gregory Rayburn told reporters that there was always a chance Hostess could be saved.

"I think we have to see what unfolds," Rayburn said. "My impression is that the judge wants to understand the parties' positions and some of their logic, but it doesn't change our financial position.

"I'm happy to have the help," he added, referring to Drain's mediation following a breakdown of communication between Hostess and the union. "Maybe the judge will help. But can I handicap how it's going to go? No way."

A lawyer for Hostess' creditors' committee declined to comment.

The court-sanctioned mediation could make both sides more willing to give, said Nick Kalm, a communications consultant specializing in labor relations.

"It makes it much more likely that the company will put forward something that is less draconian... and the union will take it. The union realizes they are out of options," said Kalm.

BEHIND CLOSED DOORS

The BCTGM called the strike on November 9 after Hostess sought and won court approval to impose wage and benefit cuts.

Unlike other unions representing workers at Hostess, the BCTGM did not contest Hostess's action -- which allowed it to reject a collective bargaining agreement and impose its offer.

Given the fact that the union did not fight Hostess's motion in court, Judge Drain said it was "somewhat unusual to say the least, and perhaps illogical" that the union would then strike against it.

"Its an odd approach," Drain said. "Before thousands of people are put out of work it would seem to me worthwhile for both the union and the debtors to explore why that happened."

Drain also questioned whether the union had held discussions with competitors or potential suitors about a shiftover of jobs, saying the union's response to Monday's motion implied that it sees "meaningful sales available out there beyond the piecemeal sales that this motion contemplates."

A lawyer for the union did not immediately return a phone call seeking comment on whether such discussions had taken place.

BUYERS MAY EMERGE

Analysts have said Hostess' brands, which also include Nature's Pride, Dolly Madison and Drakes, are expected to draw interest from rivals including Flowers Foods, Pepperidge Farm owner Campbell Soup Co and Mexico's Grupo Bimbo.

Brian Boyle, a food industry investment banker at D.A. Davidson & Co, said it was hard to gauge the value of the Hostess assets, given that there are a lot of plants that are old and inefficient.

"The other wild card is whether you're going to see different buyers emerge for different segments of the business. So Flowers Foods, for instance, might want the cake segment and Bimbo could want the bread piece. So it comes down to 'are the parts greater than the whole?'," Boyle said. "In either case, significant labor and benefits concessions will be required."

Private equity firm Metropolous & Co said on Friday it was interested in pursuing the company, and on Monday, Fortune reported that Sun Capital Partners was interested. Sun Capital did not return a call seeking comment.

The company did have a potential white knight at one point, according to Hostess. Last spring, an outside equity investor had made a viable proposal that would help the company reorganize, it said, but the Teamsters union refused to agree to changes to the pension program and the outside investor walked away.

The company spent the summer and fall negotiating with all of the 12 unions trying to find a common path to reorganization, and did gain certain agreements with the Teamsters and many of the other unions, though not the BCTGM. At the same time the company started putting together a liquidation plan.

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Fatal Indianapolis explosion now a homicide investigation

Authorities have launched a criminal homicide investigation into the house explosion that killed two people and damaged numerous homes in an Indianapolis neighborhood.

Indianapolis Homeland Security Director Gary Coons made the announcement Monday evening.

Marion County Prosecutor Terry Curry says search warrants are being executed and that official are looking for a white van that was seen in the neighborhood.

Officials have said they believe natural gas was involved in Nov. 10 explosion, which leveled two homes and left dozens more uninhabitable. Investigators have been focusing on appliances as they search for a cause.

Funerals were held earlier Monday for the couple killed in the explosion, 34-year-old John Dion Longworth and 36-year-old Jennifer Longworth. They lived next door to the home where investigators believe the explosion originated.

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U.S. ITC will review Apple, Samsung patent decision

WASHINGTON (Reuters) - The U.S. International Trade Commission will review a judge's decision which found that Apple did not violate patents owned by Samsung Electronics in making the iPod touch, iPhone and iPad.

An administrative law judge at the ITC had said in a preliminary ruling in September that Apple was innocent of violating the patents. The ITC, which could have opted to simply uphold the judge's decision, said that it would take up the matter. A final decision is expected in January.

If Apple is found to infringe, its devices can be banned for sale in the United States.

Apple and Samsung have taken their bruising patent disputes to some 10 countries as they vie for market share in the booming mobile industry.

Apple won a huge victory in August when a U.S. jury found the South Korean firm had copied key features of the iPhone. Apple was awarded $1.05 billion in damages. That ruling is under appeal.

In its announcement that it would review the case, the ITC asked for briefings on how it should consider standard essential patents, which are normally expected to be licensed widely and on fair, reasonable and non-discriminatory terms. The use of standards helps companies ensure devices are interoperable.

Some antitrust enforcers have argued that it is wrong for companies which own standard essential patents to ask for infringing devices to be barred from the country except in extreme instances.

The commission is reviewing a decision by ITC Judge James Gildea, who said in September that Apple did not violate the four patents at issue in the case, which was filed in mid-2011.

The two standard essential patents in the complaint are related to 3G wireless technology and the format of data packets for high-speed transmission.

Apple has a parallel complaint filed against Samsung at the ITC, accusing Samsung, a major Apple chip provider as well as a global rival, of blatantly copying its iPhones and iPads. An ITC judge said in that case that Samsung infringed on four Apple patents. The full ITC will issue a final decision in February.

Apple has waged an international patent war since 2010 as it seeks to limit growth of Google's Android system. The fight has embroiled Samsung, HTC and others who use Android.

Google's Android software, which Apple's late founder Steve Jobs denounced as a "stolen product," has become the world's No. 1 smartphone operating system.

Samsung is the world's largest smartphone maker, while Apple is in third place. Many experts consider Samsung's Galaxy touchscreen tablets the main rival to the iPad, although they are currently a distant second to Apple's devices.

Samsung is also a parts supplier to Apple, producing micro processors, flat screens and memory chips - both dynamic random access memory (DRAM) chips and NAND memory chips - for the iPhone, iPad and iPod. Apple has reduced orders from Samsung for chips and screens.

The case at the International Trade Commission is No. 337-794.

(Reporting By Diane Bartz; Editing by Bernard Orr and David Gregorio)

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Marlins salary dump to Toronto finalized

MIAMI (AP) — The Miami Marlins' latest payroll purge received final approval Monday from the commissioner's office, and as the team's top baseball executive began to discuss the deal during a conference call, a bad connection generated waves of reverberating noise that filled the phone line.

Nearly a week after the Marlins swung their widely ridiculed trade with Toronto, negative feedback keeps coming.

Commissioner Bud Selig approved the blockbuster deal, however, even though it made Marlins fans irate and made the team a nationwide punch line. The trade sends All-Star shortstop Jose Reyes to the Blue Jays along with pitchers Mark Buehrle and Josh Johnson, catcher John Buck and outfielder Emilio Bonifacio for seven players, none of whom has a big-money contract.

Miami received infielders Yunel Escobar and Adeiny Hechavarria, pitchers Henderson Alvarez, Anthony DeSclafani and Justin Nicolino, catcher Jeff Mathis and outfielder Jake Marisnick.

By swinging the deal only months after the Marlins moved into a new stadium built with taxpayer money, they pared from their books $146.5 million in payroll. That's their net savings after agreeing to send $8.5 million to the Blue Jays as part of the trade.

Marlins president of baseball operations Larry Beinfest said he understood why fans were mad, and confirmed the trade was necessary because owner Jeffrey Loria wanted to pare payroll. Beinfest also conceded the deal will make it harder for the team to recruit free agents in the future.

But Selig decided not to block it.

"This transaction, involving established major leaguers and highly regarded young players and prospects, represents the exercise of plausible baseball judgment on the part of both clubs (and) does not violate any express rule of Major League Baseball and does not otherwise warrant the exercise of any of my powers to prevent its completion," Selig said in a statement. "It is, of course, up to the clubs involved to make the case to their respective fans that this transaction makes sense and enhances the competitive position of each, now or in the future."

The players traded by the Marlins have combined guaranteed salaries of $163.75 million through 2018, including $96 million due Reyes.

"I understand the pause the fans have with the instability in our roster at a time when we were hoping to be very stable in the new stadium," Beinfest said. "It's not a lot of fun."

By contrast, the trade stamps the Blue Jays as contenders in the AL East. They haven't reached the playoffs since winning their second consecutive World Series in 1993.

Miami also finalized a deal with outfielder Juan Pierre, who agreed to a $1.6 million, one-year contract. That leaves the Marlins with an estimated opening-day payroll of $36 million for active players, which would be their lowest since 2008. In the latest figures, Oakland had the lowest payroll in the majors this year at $59.5 million.

While Beinfest said the Marlins acquired championship-caliber talent, fans believe owner Jeffrey Loria's goal was to increase his profits in the new ballpark rather than put increased revenue into the roster.

"We did receive a payroll range from ownership that we needed to achieve," Beinfest said. "With this transaction, we have achieved that payroll range."

The Marlins flopped as big spenders. They began the year with a franchise-record payroll of $112 million, then went 69-93, their worst record since 1999.

After sinking to last place by midseason, the Marlins traded former NL batting champion Hanley Ramirez, second baseman Omar Infante, right-hander Anibal Sanchez and closer Heath Bell. Reyes, Buehrle and Bell signed multiyear deals as newcomers a year ago during an unprecedented Marlins spending spree, and Beinfest acknowledged other free agents might be now reluctant to sign with Miami.

"It'll be a factor," he said. "I don't think we're happy about this at all. I understand there may be some disdain in the marketplace. We won't know until we get into those negotiations with free agents. It's definitely not great for the club, and we're going to have to deal with it."

Miami's biggest remaining star, slugger Giancarlo Stanton, has been among those expressing anger about the trade. Beinfest said he hadn't talked with Stanton about the deal.

"I know this is an emotional time," Beinfest said. "I'm sure it has been tough for him. Our feeling was to maybe let the dust settle a little bit and then talk to Giancarlo. I hear the frustration. It's not unexpected. This has been a tough go, but we think it's best for us moving forward."

Players' union head Michael Weiner withheld comment, saying he was awaiting more input from Major League Baseball.

In January 2009, the union reached an agreement with MLB and the Marlins covering 2010-12 which Weiner said was a "response to our concerns that revenue sharing proceeds have not been used as required. As part of the deal, Weiner said the team planned to "use such proceeds to increase player payroll annually as they move toward the opening of their new ballpark."

Selig said he was sensitive to how Marlins fans reacted to the trade.

"Baseball is a social institution with important social responsibilities, and I fully understand that the Miami community has done its part to put the Marlins into a position to succeed with beautiful new Marlins Park," Selig said. "Going forward, I will continue to monitor this situation with the expectation that the Marlins will take into account the sentiments of their fans, who deserve the best efforts and considered judgment of their club. I have received assurances from the ownership of the Marlins that they share these beliefs and are fully committed to build a long-term winning team that their fans can be proud of."

NOTES: Pierre would earn a $25,000 bonus if he's an All-Star, $25,000 each for winning a Gold Glove or Silver Slugger, $50,000 if he's an LCS MVP, $100,000 if he's the World Series MVP and $100,000 if he's the league MVP.

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AP Sports Writer Ronald Blum in New York contributed to this report.

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