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Will Hostess Mediation Lead to a Sweet Deal?

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By Deanne Katz, Esq. on November 19, 2012 2:42 PM

Stay calm Twinkie fans. A court-ordered Hostess mediation with union reps may save the company after all, Reuters reports.

News that the bankrupt iconic bakery company was planning to liquidate spread quickly on Friday. But on Monday, a judge ordered Hostess and its bakers' union into private mediation to try to avoid a complete shutdown.

The talks are set to begin Tuesday, and while there is hope for the junk-food giant, mediation doesn't necessarily mean the issues will be resolved.

Mediation is an alternative to litigation for a dispute between parties. Rather than going through an adversarial process, the parties attempt to resolve their dispute cooperatively.

Unlike a negotiation, mediations involve a neutral third party.

The discussion is facilitated by a mediator who tries to help the parties compromise. The hope is that they can find some common ground and reach a resolution without trial. The mediator ideally helps each party see the other's point of view.

Hostess asked for permission to liquidate after it failed to reach an agreement with the Bakery, Confectionery, Tobacco Workers and Grain Millers International union over compensation and benefits, according to Bloomberg News.

To prevent the liquidation, which would result in the loss of more than 18,000 jobs, Judge Robert Drain asked both sides to try resolve their disagreement through mediation, reports Reuters.

Mediation is a good alternative to litigation and it's not just for big corporations.

Any time a legal dispute involves parties with an existing relationship, such as divorce, landlord-tenant, labor, and neighbor disputes, mediation may be the right choice. It helps to preserve relationships rather than just enforce rights.

You may not need an attorney for a mediation, but it's a good idea to ask your lawyer whether mediation is right for your case. If it is, she can also help you prepare.

In the Hostess mediation, the parties will meet in private Tuesday and court will reconvene Wednesday. But if a sweet deal can't be reached, the company may end up right back where it started.

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