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Union to Lose Big in Hostess Bankruptcy (Update 1)

Hostess Brands's popular Twinkies dessert was invented in the 1930s by the Continental Banking Company. Initially Twinkies had strawberry and banana fillings. During World War II, a shortage and rationing of bananas forced Continental Bakeries to switch the filling to vanilla, a turning point in American junk food lore.

Nearly a half billion Twinkies are reportedly made every year and former President Bill Clinton put a Twinkie in a time capsule, the company said on its Web site.

Continental Banking had a history that traced back to the 1840s until a 1995 merger with Hostess' predecessor Interstate Bakeries, which valued the company at $330 million. Recently, the company looked to divest assets like its Mrs. Cubbison's brand, which it sold to Sugar Foods for $12 million in 2011, but was unable to sell other businesses to buyers like Kraft (KFT), Campbell Soup (CPB) and private-equity firms Blackstone (BX) and KKR (KKR), the Journal reported.

-- Written by Antoine Gara in New York

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