Hostess Brands has filed a motion to liquidate, and it would be easy to assume that is the end of the well-known company.

Not so fast.

First of all, filing a motion is not the same thing has having the court grant it, which is not the same thing as actually implementing the relief requested in the motion.

And there is always a chance that the unions and Hostess (and its private equity backers) will reach a deal before the plug is pulled.

More broadly, there is a good chance we will see the Hostess brands again.

If the debtor does liquidate, that will include the sale of Hostess’s intellectual property, including trademarks like Twinkie.

One could easily imagine some other snack maker, or an outside investor, would be quite willing to acquire the rights to make Twinkies, Ding Dongs and those curious “pies” with all the white frosty stuff on the outside.

This is especially true if the right to make these delights comes without all of the other parts that makes up Hostess. Sad to say, that list is likely to include many of the employees.

The employees along with the other unsecured creditors will be the real losers if this happens. Sale proceeds go first to secured creditors and the administrative expenses, which includes the professionals running the Chapter 11.

Which brings us back to the beginning. The unions have to figure out whether this motion is just one more bluff by the private equity backers, who clearly are willing to play hardball, or whether they really do intend to liquidate.

If it’s a bluff, they should continue striking. If it not a bluff, now is the time to strike a deal and avoid layoffs. But at this point, the private equity firms seem to be holding most of the cards.

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