US Trustee Wants to Manage Hostess Liquidation

Wants to convert case from Chapter 7 to Chapter 11

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.