Best October in 6 years for area home sales









The Chicago area's housing market last month regained the momentum it lost in September, resulting in more homes being sold than in any October since 2006.

Sales of existing single-family homes and condominiums in the nine-county Chicago area totaled 8,326 properties in October, according to figures released Monday by the Illinois Association of Realtors. While below some of the monthly sales totals recorded earlier in the year, the volume was an increase of 11.3 percent over September and 44.1 percent higher than the 5,776 homes sold in October 2011.

Within the city of Chicago, 2,009 homes were sold in October, an improvement of 8.8 percent over September and up 53.1 percent from October 2011. Condos accounted for 60 percent of the city's sales volume.

The strong sales continue to remove excess inventory for the market, which is necessary before price appreciation can truly begin. The number of homes listed for sale is at its lowest point in five years, according to Midwest Real Estate Data LLC, the local multiple listing provider. 

Meanwhile, the number of pending home sales in the Chicago area, meaning properties that are under contract but the sales have not yet closed, totaled 10,364 in October, the highest it's ever been except for April 2010 when home sales were affected by federal homebuyer tax credit programs.

For the Chicago area as a whole, the median price of a home was $153,000, the lowest it's been since March but still ahead 2.1 percent from October 2011's $149,900.  Among local counties, DuPage County was one of those that saw double-digit, year-over-year monthly appreciation, rising 11.4 percent in October, to $195,000.

Within the city, the median price rose to $175,000, up 8 percent from a year ago but again, the lowest monthly price recorded since March. In the condo market, the median price fell 8.7 percent from September, to $210,000. However, that sum was a 13.5 percent increase from October 2011.

Last month, 43 percent of sales within the city were either foreclosures or short sales.


The median is the point at which half the homes are sold for more and half for less.

"There's a great deal of end-of-the year excitement," said Zeke Morris, president of the Chicago Association of Realtors. "Typically our numbers are down in the fourth quarter but we're beginning to catch up to other markets in Illinois."

Geoffrey J.D. Hewings, a University of Illinois economist, attributed the improved sales performance to a slowly improving economy, stronger consumer confidence and continued low mortgages rates.

The monthly average commitment rate for the benchmark 30-year, fixed-rate mortgage in the Chicago area was 3.36 percent in October, compared with 3.49 percent in September and 4.07 percent in October 2011, according to the Federal Home Loan Mortgage Corp. Last week, Freddie Mac said average mortgage rates hit a new all-time low in its weekly survey, of 3.34 percent for a 30-year, fixed rate mortgage.

mepodmolik@tribune.com | Twitter @mepodmolik



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2 reported dead in Wisconsin plane crash













Fatal plane crash


Members of the Burlington Police Department guard the scene of a plane crash in Burlington Wis.
(Armando L. Sanchez, Chicago Tribune / November 18, 2012)





















































Local officials report that two people have died in the crash of a small plane near the Burlington, Wis., airport, an FAA spokesman said.


The crash of the single-engine Grumman AA1 happened about 1:26 p.m. near the airport as the ariplane tried to land, said Lynn Lunsford, a spokesman for the Federal Aviation Administration.


There were two people on board, and local officials were reporting to the FAA that they both died, but FAA officials have not independently verified that, he said.





The airplane is registered to a man in Antioch, on the Illinois-Wisconsin border, according to FAA records.


Burlington officials referred questions to the Walworth County Sheriff’s Department, which was not immediately releasing information.


Check back for updates.


chicagobreaking@tribune.com


Twitter: @ChicagoBreaking






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Cablevision subscribers sue over Hurricane Sandy outages
















LOS ANGELES (TheWrap.com) – Even as workers scramble to clean up the mess that Hurricane Sandy left in the Northeast two weeks ago, a legal mess is beginning to spill into the court system.


Cablevision subscribers Jeffery and Irwin Bard filed a class-action lawsuit against the cable provider in New York Supreme Court this week, seeking restitution for television, telephone and internet outages caused by Sandy, according to court papers obtained by TheWrap.













The suit, which alleges breach of contract and unjust enrichment, claims that Cablevision “continued to advertise falsely that it was providing services to its customers” even after the storm caused outages for its customers, and “could not restore services to many of its customers for days, or even weeks.”


Moreover, according to the complaint, Cablevision continued to issue bills for services it was unable to provide in the aftermath of the storm, and “instituted a secretive policy to offer ‘customer credits’ only to customers who affirmatively and actively demanded rebates on a discretionary basis,” rather than offer across-the-board rebates to its customers, even though it had access to which customers had lost power and for how long.


A spokesman for Cablevision told TheWrap that the lawsuit “misstates the facts and is without merit,” and that Cablevision has “an extremely broad and customer friendly credit policy following Sandy.”


“Blanket or arbitrary credits for cable outages could shortchange customers because each case is different and our policy covers the entire period of time when Cablevision service was out, including when the service interruption was caused by the loss of electrical power,” the spokesman said in a statement.


Cablevision does allow for customers to call and process their credit, or go to optimum.net/credit, where they can detail the period of their outage to receive credit.


The suit, filed Tuesday, seeks unspecified damages for each member of the class, plus attorneys’ fees and court costs, along with a permanent restraint barring Bethpage, N.Y.-based Cablevision from billing or invoicing customers when there’s a service outage of more than 24 hours.


(Pamela Chelin contributed to this report)


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News Analysis: Steroids and Back Pain: An Uneasy Match


RANDALL KINNAIRD’S legal clients had steroids injected into their backs last summer for a wide range of reasons. Of the 25, one got three shots in a two-month period when pain never totally disappeared. Another got one as a preventive measure because she was going on a trip to Europe and was worried that cobblestones would aggravate an old injury.


Now the 25 — or their survivors — have engaged Mr. Kinnaird, one of Nashville’s leading lawyers, to sue the New England Compounding Center. Three have died, one is paralyzed, several more are still hospitalized and all suffer blinding headaches — victims of the meningitis that resulted from vials of steroid medicine contaminated by fungus.


The New England Compounding Center certainly seems deserving of its current status as the prime culprit in a tragic outbreak that has killed 32 and sickened 438. The bottles of supposedly sterile steroid medication it shipped were reportedly so tainted that white fuzz could be seen floating in some vials.


But, experts say, the now notorious Compounding Center has a nationwide network of unwitting enablers and accomplices: There are the doctors who overprescribe an invasive back-pain therapy that, in studies, has not proved useful for many of the patients who get it. And there are the patients, living in an increasingly medicalized society, who want a quick fix for life’s aches and pains.


The use of steroid injections to treat back pain has skyrocketed in the past 15 years — out of proportion to growth in the number of patients with back pain, or the aging of the population. The frequency of steroid injections dispensed to Medicare patients rose 121 percent from 1997 to 2006. Washington State found that the use of back injections grew 12.6 percent between 2006 and 2009, at a cost to the state of $56 million. Some people received more than 10 shots a year.


The increase in treatment has not led to less pain over all, researchers say, and is a huge expense at a time of runaway health costs. “There are lots of places doing lots of injections for conditions that haven’t been shown to benefit,” says Dr. Janna Friedly, a researcher at the University of Washington, who added, “Sadly, some of the patients who got meningitis were probably in that category — they did not have conditions where steroid injections were indicated.”


Studies are at best inconclusive about exactly which groups of back-pain patients are likely to benefit from steroid shots. Though some patients clearly get much-needed relief, health researchers are nearly unanimous that the treatment is vastly overused in the United States.


But Dr. Laxmaiah Manchikanti, head of the American Society of Interventional Pain Physicians, said the increasing number of spine injections was just part of “an exponential increase in all interventional techniques” and is a good thing, reflecting a better understanding of chronic pain and patients’ demands for improved pain relief.


Though doctors are still arguing, most academic researchers say there is no evidence that steroid injections are useful in easing straightforward chronic low back pain. Professional guidelines say such shots should generally not be used for back pain that is less than four to six weeks old, which studies show almost always gets better with noninvasive treatments. Although many Medicare patients get spinal injections to treat a condition called spinal stenosis, a narrowing of spaces between bones of the spine, Dr. Friedly said, shots are not used for that condition in many European countries.


Spinal injections, which can cost between $600 and $2,500, including the fees for treatment rooms, have been fostered and promoted by the rising number of pain clinics and pain specialists — mostly anesthesiologists and rehab doctors — who invest in extra training to learn procedures like spinal injections.


“There used to be only a small number of people who did this, but that’s gone way up, and reimbursement has gone up, too,” says Scott Forseen, a doctor who studies the treatment of back pain at the Georgia Health Sciences University. The number of spinal injections given in any geographical area correlates better with the number of local specialists trained in the procedure rather than the amount of back pain, Dr. Friedly says. There is an old saying in medicine: “When you go to Midas, you get a muffler.”


The shots — which may include a steroid and an anesthetic — are often dispensed at for-profit pain clinics owned by the physicians holding the needle. “There’s a lot of concern about perverse financial incentive,” Dr. Friedly added.


Mr. Kinnaird’s clients got their injections at the St. Thomas Outpatient Neurosurgery Clinic, a limited-liability corporation half owned by doctors, which occupied a floor of one of Nashville’s major hospitals. It gave 5,000 injections a year, or about 20 each business day, and epidural steroid injections are listed on its Web site as its “top procedure.”


Since guidelines for injections are being disputed among doctors’ groups, it is hard in most cases to say if a particular patient should or should not have been offered an injection, says Marc Lipton, a Michigan attorney who is representing more that 20 patients with fungal meningitis. Though he believes that steroid shots are overused, he says many of the patients he represents were treated appropriately, for example, receiving an injection for pain from a herniated disc in an attempt to stave off back surgery. He and other lawyers are, for now, targeting the Compounding Center in product liability lawsuits.


But, says Dr. Forseen: “You have to use injections selectively, and selectivity has gone way down. In some places, people get injections because they’ve walked in the door.”


Patients have proved eager consumers of the new medical offering, desirous of a quick cure rather than waiting the weeks or months for the normal healing process to occur.


Mr. Kinnaird, the lawyer, says: “If I hurt my back in the ’70s, my doctor would say, go to the beach, get a few beers, relax, you’ll be fine. Now if you hurt your back, you go to the doctor and right away there’s an M.R.I., and they need to fix something. Maybe you should take an injection.”


And steroid shots are not a cure-all, even for the conditions for which doctors agree an attempt is worthwhile: low back pain accompanied by signs of nerve injury like tingling or weakness in a leg. One-third of such patients will get better, one-third will show some improvement and some will show no improvement at all, Dr. Forseen said.


When Oregon’s Health Evidence Review Commission earlier this year explored narrowing reimbursement for injections to certain conditions, it got an earful of public comment from groups like the International Spine Intervention Society.


“Obviously they are not utilizing the literature correctly,” said Dr. Manchikanti, adding that attempts to limit the shots were motivated in part by an effort to control costs and by competition from other medical specialties.


Private insurers vary considerably in coverage for the procedure, though some will pay after two weeks of back pain.


Back pain is, of course, a debilitating condition. And modern medicine has produced some miraculous cures. But from now on when doctors and patients are tempted to say “what’s the harm in trying an injection” to dispense with a nagging back — they will be more aware of just how big the risk can be.


A physician and a reporter for The New York Times.



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Investors rush in to rent out foreclosures









The foreclosed home on Kenmore Street in Aurora was an outdated, unkempt eyesore until crews arrived this fall, performing thousands of dollars of work to make it attractive and modern, inside and out.


But it wasn't until workers walked across the street to ask for some water that neighbors Mario Cervantes and Oralia Balderas-Cervantes learned that a corporation, not a consumer, had bought the house, intending to turn it into a rental property. Despite being landlords themselves, the couple aren't sure they like the idea.


"If it's going to be a company that is watching out for the community, yes," Cervantes said. "If it's going to be a company that is watching out for themselves, no."





Added Balderas-Cervantes: "I'd rather see a homeowner. A lot of renters don't care. It's like renting a car versus buying a car. It's different."


Similar scenarios and concerns are unfolding across Chicago and in other markets hard-hit by the housing crisis. Well-capitalized, out-of-town private equity funds are scouring neighborhoods, paying cash for distressed single-family homes and renting them out. The opportunities are plentiful, enabling investment groups to profit from low home prices, rising rents and an increase in the number of potential renters.


The transactions are returning vacant properties to active use. But they also are stoking fears among neighbors and municipalities about the long-term effect of large, private investors — including many that are operating under the radar — in their communities.


"This scares the hell out of me," said Ed Jacob, executive director of Neighborhood Housing Services of Chicago Inc. "In this rush to say this is a new asset class, are we creating the next community development problem?


"You talk to them and it's all about neighborhood recovery. They all have the narrative down."


In April, housing research firm CoreLogic named the Chicago area one of the better housing markets for institutional investor funds. It cited the area's large number of foreclosures, which will increase the number of vacant homes, and the estimated rental income relative to the low cost of acquisition.


The general strategy of the companies is the same: buy low, make the necessary upgrades, fill them with tenants and then sell the homes in three to seven years. With companies and analysts anticipating projected returns of at least 8 percent, there also is talk of creating publicly traded real estate investment trusts.


"What this reminds me of is the dot-com boom," said Rick Sharga, executive vice president of Carrington Mortgage Holdings LLC, a California firm whose asset management arm is actively looking in the Chicago market. "That's what this feels like. Every investor in America wants to buy foreclosures and turn them into rentals."


Two statistics increasing that appetite are the homeownership rate and rental rates. Foreclosures, tight lending conditions and wary consumers have pushed down the nation's homeownership rate to 65.5 percent at the end of September, according to census data. Meanwhile, the percentage of vacant rental units has been on a steady decline since 2010 as more people opt for leases rather than mortgages.


Tighter inventories are pushing up rents. As of October, annualized rents in Chicago were up 7.7 percent, more than the national increase of 5.1 percent, online real estate site Trulia found.


But investors aren't flocking to all neighborhoods equally. Most want homes in desirable neighborhoods with strong area employment. They also look at the strength of local rules protecting landlords in disputes with tenants.


After vetting the tenant and securing a lease, property managers say they routinely drive by the homes and sometimes schedule inside inspections to protect their investment.


Weighing risks, rewards


It remains to be seen whether their expectations will be met. One problem with the business model is there's no performance track record to speak of. And as housing prices slowly recover, acquisition costs also will increase and cut into returns.


There also isn't any history on property management firms tasked with overseeing so many scattered-site rental properties. Any well-publicized mistakes involving poorly maintained properties or wronged tenants could taint investors' reputations.


That's one reason why big-name players are likely to avoid buying in neighborhoods where they fear a greater chance of eviction proceedings occurring.


"You make one mistake in those properties and you'll be toast," Sharga said.





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Notre Dame up 31-0 at halftime









SOUTH BEND, Ind. -- Manti Te'o emerged from the tunnel, spun around with his arms open to the Notre Dame Stadium crowd and the Irish linebacker ran into a bear hug from his father near midfield. With that, the emotional pregame Senior Day festivities ended.

The celebration, however, raged on.

Everett Golson had three touchdown passes and Notre Dame posted a 38-0 win over hapless Wake Forest. The Irish demolished their visitors with 430 yards of first-half offense to ensure they will be 11-0 entering a showdown at USC next weekend.

Golson left in the third quarter after hitting 20-of-30 passes for a career-high 346 yards, with Cierre Wood rushing for 150 yards and the defense allowing Wake Forest just seven first downs and 155 total yards through three quarters.

That the day would be an afternoon-and-evening celebration was clear four plays into it. Wood burst through the Wake Forest defense for a 68-yard touchdown run, the longest rush of the season for the team, and it was 7-0 with the Irish just getting started.

A skull-rattling hit by Carlo Calabrese on the next series induced a Wake Forest fumble, with the Irish recovering and then driving to a two-yard Golson touchdown pass to Tyler Eifert and a 14-0 lead.

When Golson hit John Goodman for a 50-yard score on the next series, Notre Dame had a 21-0 lead after winning five home games by a total of 23 points before Saturday.

It was a rout, thoroughly, and not even an ill-advised Golson interception on the next series mattered. Wake Forest punted, and six plays after that, a terrific double-move from Irish receiver TJ Jones resulted in a 34-yard score and a 28-0 lead midway through the second quarter.

Kyle Brindza added a 25-yard field goal late in the first half for a 31-0 halftime edge, and George Atkinson III's 9-yard run made it a 38-0 game with three and a half minutes left in the third quarter.

bchamilton@tribune.com

Twitter @ChiTribHamilton



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Jon Stewart tells Bill O’Reilly to stop worrying about loss of “traditional America”
















LOS ANGELES (TheWrap.com) – Jon Stewart has a message for Fox News host Bill O’Reilly — chill out about the loss of “traditional America.”


“The Daily Show” funnyman skewered the right-leaning network on Thursday for treating the re-election of President Barack Obama – a victory aided by minority voters – as a cataclysm for the white men who were once in the driver’s seat in America. Stewart implied that this longing on behalf of some of the network’s commentators for a Grover’s Corners past may not be rooted in reality.













“Yes Bill,” Stewart said. “Obama’s re-election marked the moment that traditional America ended. The moment when the family from the 1950s sitcom ‘Leave it to Beaver’ ceased to be real.”


Moreover, Stewart said that ethnic demographics are constantly shifting in the United States and that such changes can be a little troublesome for the folks who were in control.


“You don’t need to worry so much,” Stewart counseled. “What you are demonstrating is the health and vitality of America’s greatest tradition – a fevered, frightened ruling class lamenting the rise of a new ethnically and religiously diverse new class. One that will destroy all that is virtuous and good and bring the American experiment crashing to the ground.”


He added that those rising ethnic groups work so hard so that their children and grandchildren have the opportunity to be intolerant of new immigrant populations. Thus the circle of life continues.


TV News Headlines – Yahoo! News



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Well: Meatless Main Dishes for a Holiday Table

Most vegetarian diners are happy to fill their plates with delicious sides and salads, but if you want to make them feel special, consider one of these main course vegetarian dishes from Martha Rose Shulman. All of them are inspired by Greek cooking, which has a rich tradition of vegetarian meals.

I know that Greek food is not exactly what comes to mind when you hear the word “Thanksgiving,” yet why not consider this cuisine if you’re searching for a meatless main dish that will please a crowd? It’s certainly a better idea, in my mind, than Tofurky and all of the other overprocessed attempts at making a vegan turkey. If you want to serve something that will be somewhat reminiscent of a turkey, make the stuffed acorn squashes in this week’s selection, and once they’re out of the oven, stick some feathers in the “rump,” as I did for the first vegetarian Thanksgiving I ever cooked: I stuffed and baked a huge crookneck squash, then decorated it with turkey feathers. The filling wasn’t nearly as good as the one you’ll get this week, but the creation was fun.

Here are five new vegetarian recipes for your Thanksgiving table — or any time.

Giant Beans With Spinach, Tomatoes and Feta: This delicious, dill-infused dish is inspired by a northern Greek recipe from Diane Kochilas’s wonderful new cookbook, “The Country Cooking of Greece.”


Northern Greek Mushroom and Onion Pie: Meaty portobello mushrooms make this a very substantial dish.


Roasted Eggplant and Chickpeas With Cinnamon-Tinged Tomato Sauce and Feta: This fragrant and comforting dish can easily be modified for vegans.


Coiled Greek Winter Squash Pie: The extra time this beautiful vegetable pie takes to assemble is worth it for a holiday dinner.


Baked Acorn Squash Stuffed With Wild Rice and Kale Risotto: Serve one squash to each person at your Thanksgiving meal: They’ll be like miniature vegetarian (or vegan) turkeys.


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Chocolatier finds sweet spot in Belize








Katrina Markoff, the founder of high-end Chicago chocolatier Vosges Haut-Chocolat, is nearing completion on two high-profile projects: a winery-style chocolate facility in Logan Square and an education center at a cacao plantation and eco-lodge in Belize.


Markoff isn't ready to talk about the Logan Square project, her spokeswoman said. But in an interview last week, she said she hopes the Belcampo farm in Belize will become the source of a majority of Vosges' cacao once its plants mature.


The project means Markoff will soon play a role in every aspect of production from seed selection through packaging without having to assume the financial risk of owning a tropical plantation.






Belcampo Group CEO Anya Fernald said the education center that Markoff helped design will open in mid-December, and Markoff will teach her first "master class" on cacao to guests at the 12-room lodge April 23-27. In exchange for her time and expertise, Markoff will receive a better price on the beans.


"I've always wanted to be involved through the full vertical, from actually growing the varietals of cacao I want, and being particular about how they're grown and harvested and fermented and dried," she said.


Once the farm reaches full yield in about five years, Fernald estimated it will produce 250,000 pounds of cacao annually. Already, with only 60 acres planted so far — all under a rain forest canopy — Fernald said Belcampo is already Belize's largest cacao plantation.


"The integrity of that project is really, really unique and special," Markoff said. "Typically when people buy beans to make chocolate, they just buy whatever is available in the commodity market. There's not a lot of control over how it's grafted, where it's planted, how it's nurtured, who's taking care of it. You just don't get that kind of control."


Bluhm continues gambling push


Chicago real estate and gambling executive Neil Bluhm is entering the race to build one of four planned casinos in Massachusetts and has launched an online gaming division in Chicago, said Greg Carlin, chief executive of Bluhm's Rush Street Gaming.


Earlier this year Rush Street hired Richard Schwartz from Waukegan-based WMS Industries and appointed him president of Rush Street Interactive, its new online gaming division.


"We think (Internet gaming) is going to be eventually legalized throughout the country, or in jurisdictions that have bricks-and-mortar casinos," Carlin said. "Illinois is actually a leader in selling lottery tickets online and could be a leader in Internet gaming as well if they get ahead of the curve and pass legislation before some of the other states."


Nevada and Delaware have legalized some forms of Internet gambling.


In recent years, Bluhm has built three casinos: Rivers Casino in Des Plaines, one in Pittsburgh and another in Philadelphia. In October, Bluhm sold his first U.S. casino, Riverwalk Casino and Hotel, in Vicksburg, Miss., for $141 million in cash to Churchill Downs Inc. (Bluhm held a 70 percent stake in Riverwalk.)


Churchill Downs, a horse racing and wagering company, also owns Arlington Park in Arlington Heights. Its largest shareholder is Duchossois Group, founded by Arlington Park Chairman Richard "Dick" Duchossois.


Duchossois has been trying to persuade the Illinois Legislature to approve slots at racetracks, which, if successful, would make Arlington Park a competitor of Bluhm's Des Plaines casino.


As for the Massachusetts casino, the gambling commission there will weigh applications for casino licenses well into 2013.


Alvarez joins Culloton


Public relations firm Culloton Strategies has hired Michael Alvarez, a commissioner of the Metropolitan Water Reclamation District of Greater Chicago, as senior vice president for public affairs.


As the Sun-Times reported in January, Alvarez, 32, has worked for Barack Obama, Rod Blagojevich and Richard M. Daley — while he has close ties to Ald. Richard Mell, Blagojevich's father-in-law.


In addition to his $70,000 annual salary at the water district, Alvarez has a $60,000-a-year public relations contract with the Illinois Sports Facilities Authority and a "fast-growing" lobbying practice, the Sun-Times reported.






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Hostess shuttering doors, ending era of iconic brands

Hostess, the company that makes Twinkies and other sugary snacks, has announced it's going out of business following a worker strike.








Fear not for the Twinkie. In all likelihood it will outlive us all.

The same cannot be said for Hostess Brands, the bankrupt baker responsible for Twinkies, Wonder Bread and other goods. The company said Friday it has asked a bankruptcy judge for permission to go out of business and lay off 18,500 workers, blaming a labor strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.

In the Chicago area, Hostess employs about 300 workers making CupCakes, HoHos and Honey Buns in Schiller Park. Hostess also has a bakery in Hodgkins, where 325 workers make Beefsteak, Butternut, Home Pride, Nature's Pride and Wonder breads. The company's connection to Chicago is more than crust or frosting deep: the Twinkie was invented in the Chicago area in 1930.

"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," Gregory Rayburn, Hostess' chief executive, said in a statement.

Texas-based Hostess, which has about $2.5 billion in sales, said it had suspended operations at all of its 33 plants around the United States as it moves to start liquidating assets. The expectation is that other baking companies or investors will scarf down the brands, giving its products a good chance at a new life under different ownership.

"We'll be selling the brands and as much of the infrastructure as we can," said company spokesman Lance Ignon. "There is value in the brands."

Gary Stibel, founder of the New England Consulting Group, said "the jury's still out," on the company's future, adding that the firm may be able to "work something out in the eleventh hour."

"There's a lot of activity going on," said Stibel, who added that his firm is involved in the conversations, but not representing Hostess. "Let's just say there are a lot of folks who are going to be working over the weekend."

Stibel said the only thing for certain is that "these brands aren't going anywhere."

"In the final analysis, these brands will return," he said. "Tylenol came back, Coke came back, and many of (the Hostess brands) will do better once this is over with."

Among the company's other brands: Ho Hos, Ding Dongs, Sno Balls, Donettes, Dolly Madison Zingers and Drake's snack cakes.

The closure of Hostess plants creates a complication for other companies, including Supervalu Inc., parent of the Jewel supermarket chain. Hostess was the contract baker for Supervalu's private label Essential Everyday breads, sold in Jewel.

"It is possible that in some markets there may be some shortages of Essential Everyday, but we are quickly working to implement our contingency plan," spokesman Mike Siemienas said.


The dispute that closed Hostess focused on cost-cutting efforts by a company that has been in bankruptcy for all but three of the past eight years. Plagued by high labor and pension expenses, the company had sought numerous concessions from workers and needed more.

Hostess said the bakery union strike that began last week had crippled its ability to produce and deliver products at several facilities, and it had no choice but to give up its effort to emerge intact from bankruptcy court.

The union accused Hostess in a statement of making unreasonable demands, including wage and benefit cuts of roughly 30 percent for workers, while top executives of the company received large pay raises.

"The crisis facing Hostess Brands is the result of nearly a decade of financial and operational mismanagement that resulted in two bankruptcies, mountains of debt, declining sales and lost market share," said Frank Hurt, the union's president. "The Wall Street investors who took over the company after the last bankruptcy attempted to resolve the mess by attacking the company's most valuable asset – its workers."

The Teamsters Union, which also represents 6,700 workers at Hostess Brands plants, had settled an earlier labor dispute with the company.

"The Teamsters Union tried everything in its power during the company's most recent financial difficulties to shape an outcome that would put Hostess on strong footing to be viable and preserve jobs," said Teamsters General-Secretary Ken Hall, in a statement. "Unfortunately, the company's operating and financial problems were so severe that it required steep concessions from a variety of stakeholders but not all stakeholders were willing to be constructive."

Hostess, a vintage favorite, had lost some ground with customers. From May 2012 to the same month in 2011, sales of Twinkies slipped 0.8 percent, Ding Dongs fell 8.7 percent and Ho Ho's tumbled 6.3 percent, according to analysis from research group Mintel.

The company ceded its top position in the pre-prepared cupcakes and brownies segment to McKee Foods, whose sales increased 1.8 percent, largely on the strength of its Little Debbie brand. Smaller rivals such as Bimbo Bakeries and Give and Go also poached customers from Hostess, as have private label offerings from grocery stores, according to Mintel.

The Hostess shutdown announcement sent shock waves through the country Friday, causing Americans to begin hoarding Ding Dongs and bemoaning their fading childhoods.

Chicago-area convenience stores reported that they'd sold out of Twinkies — some within an hour after opening. At the Walgreens adjacent to the Wrigley Building on Michigan Avenue, Twinkies were gone before 9 a.m. Friday.

Other Hostess products were flying off the shelves too. Those single serving pies that magically require no refrigeration? No more blueberry.

Salina Gonzalez made a beeline for the Hostess section at the Target at 1940 W. 33rd St. Friday afternoon.

With three sons marching behind her, the Pilsen woman smiled at seeing a few boxes of Twinkies still on the shelves.

She grabbed one. But sons Alex, 6, Noah, 9, and Nicolas, 11, were seeing no part of those treats.

"I'm picking these up for my grandmother. She had me come get some Twinkies for her," Gonzalez said.


Tribune reporter Julie Wernau and freelancer Cheryl V. Jackson contributed to this report.






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