IRVING, TEXAS – Hostess Brands, Inc. is in its second Chapter 11 bankruptcy in recent years and now has its second turnaround expert as chief executive officer.
The company announced March 9 that Gregory F. Rayburn, “a seasoned turnaround executive” has been named president and c.e.o. He succeeds Brian Driscoll, who resigned March 9, effective immediately.
Mr. Rayburn’s promotion to c.e.o. came a little more than a week after the announcement he had been hired as the company’s chief restructuring officer. He was with Kobi Partners L.L.C., a restructuring advisory services firm based in Winston-Salem, N.C.
“Greg is one of the nation’s most experienced and effective restructuring executives, and I look forward to working closely with him,” Mr. Driscoll said when Mr. Rayburn was hired. “His hiring reflects our commitment to do all that we can to emerge from Chapter 11 as a robust competitor with a solid future.”
Hostess said Mr. Rayburn will oversee the company’s bankruptcy reorganization “as well as overall corporate strategy and ongoing negotiations with the company’s unions.”
“Hostess has been in business for more than 80 years and has established a powerful and valuable brand,” Mr. Rayburn said. “I look forward to working closely with the management team and all of Hostess’ key constituents so that we can emerge from Chapter 11 as a company with a strong future that leverages its many strengths.”
The Hostess board of directors issued a statement in connection with the management change. “We want to express our thanks to Brian for his efforts during a very difficult period for Hostess,” the board said. “We also want to express our thanks to Greg for stepping in as c.e.o. His experience and proven track record in leading companies through critical transitions is precisely what Hostess needs at this point, and he has the full support of the board, our lenders and investors.”
Before his resignation this week Mr. Driscoll spent 20 months as the Hostess c.e.o. He came to the company with more than 30 years of experience in the food and beverage industry, most recently as president of sales, customer service and logistics at Kraft Foods Inc.
Mr. Rayburn is not the first turnaround specialist at the helm of Hostess. In 2004, Tony Alvarez II was named c.e.o. of Interstate Bakeries (now Hostess Brands) when the company first declared bankruptcy. Mr. Alvarez was a founder and co-c.e.o. of Alvarez & Marsal, a turnaround firm.
Overall, Mr. Rayburn is the sixth c.e.o. of the troubled company over the past decade. In addition to Mr. Driscoll and Mr. Alvarez, Charles A. Sullivan, James R. Elsesser and Craig D. Jung served in the position.
Also issuing a statement on the management change were the International Brotherhood of Teamsters.
“While this development was unexpected, we continue to work with the company, and now Mr. Rayburn, toward a negotiated resolution that will allow the company to emerge successfully from bankruptcy,” said Teamsters vice-president Ken Hall. “Obviously the situation with Hostess has been and remains extremely challenging, but as we have said before, we are committed to finding a comprehensive fix to the company’s challenges that works for our members. We have negotiations with Hostess and relevant stakeholders scheduled over the next two weeks to work toward that goal.”
Mr. Rayburn’s experience as a turnaround specialist includes service as c.e.o., chief operating officer and chief restructuring officer of several high-profile companies, including Indianapolis Downs, L.L.C.; New York City Off Track Betting Assn.; Magna Entertainment Corp.; aaIPharma Services; Sunterra Corp.; Syntax-Brillian; International Outsourcing Service and Muzak Holdings.
He served as c.r.o. for WorldCom during what was then the largest U.S. bankruptcy filing in history.
Mr. Rayburn is a former director of The Great Atlantic & Pacific Tea Co. and holds an M.A. in accounting and a B.S. in business and marketing from the University of Alabama.
He is a member of the American Institute of Certified Public Accountants.