Updated to reflect approval of Hostess Brands liquidation NEW YORK ( TheStreet) - Late on Wednesday afternoon a New York court approved Hostess Brands plan to wind down operations after 82-year old snacks maker was unable to reach a new labor agreement with its unionized workers that could have staved off the company's liquidation, initially filed on Friday. After a court mandated mediation between Hostess and the Bakery, Confectionery, Tobacco Workers and Grain Millers Union fell through late on Tuesday, a Wednesday ruling by Judge Robert D. Drain of the Southern District of New York returns the company to a 'liquidation scenario,' which will put the company's assets up for sale and cost 15,000 workers their job on the eve of Thanksgiving. The wind down may also put millions of dollars in pension obligations on the government's books. While job losses and plant closings are the worst part of Hostess Brands demise - company CEO Gregory Rayburn said in court 15,000 workers will be fired today and a further 3,200 workers will be retained to maintain plant as asset sales loom -- the company's failure may raise new questions as to whether private equity investors are using bankruptcy courts to extract investments at the expense of taxpayers. When Hostess filed its liquidation plan the company also said it would terminate its single and multi-employer pension plans. Judge Drain's approval of Hostess's liquidation on Wednesday means thousands of employee pension plans are going to fall into the hands of the Pension Benefit Guaranty Corporation, a struggling federal agency that said on Friday its financial woes may force it to draw taxpayer support. As part of Hostess Brands liquidation filing, the company said it would terminate its pension, with roughly 2,300 employees in the company's single-employer plan falling under PBGC's guaranty, according to an agency statement. The company's larger multi-employer plan may also get some PBGC support, while potentially not needing a full guarantee because losses could be mutualized. On Monday, TheStreetdetailed how private equity investors may be using the PBGC's pension guarantees to recover on losing investments or create for bargain basement buys. Hostess' liquidation -- just like the recent bankruptcies of well known companies like Friendly's Ice Cream and Eddie Bauer -- raises the prospect that sophisticated private equity and distressed debt hedge fund investors are using courts to cast off unwanted pensions on U.S. taxpayers and put a losing investment back on the track. Consider that subsequent with Hostess's liquidation plans, the Pension Benefit Guaranty Corporation disclosed on Friday that its pension plan insurance deficit grew to a record $34 billion this year, the biggest shortfall in the federal agency's history. PBGC guarantees employee pension plans after a company goes belly up, securing the retirement of roughly 43 million U.S. workers. While PBGC doesn't take government money directly - it's funded by way of insurance premiums and portfolio returns - the agency's head said on Friday that a growing deficit raises the prospect of taxpayer support. In a statement released with the agency's bleak outlook, PBGC Director Joshua Gotbaum attributed the plan's shortfall on an inability to set premiums for member companies and noted that the agency's deficit may put taxpayers at risk for the first time in its 38-year history. "PBGC may face for the first time the need for taxpayer funds," Gotbaum said on Friday. As taxpayers brace for a prospective bailout of PBGC -- which may soon include Hostess Brands a $50 million single employer plan shortfall - scores of private equity investors and corporations are reportedly lining up to pick over the assets of Hostess, the maker of consumer fattening favorites such as Ho Hos and Twinkies. A Monday report from Fortune Magazine indicates private equity firm Sun Capital might bid on Hostess Brands as a going concern. However, the report doesn't specify how pension obligations would be dealt with following the Friday termination of employee plans. Also on Monday, Flowers Foods ( FLO) increased its line of credit, in a move analysts speculated might pave the way for a bid on some Hostess assets. Pabst Blue Ribbon owner C. Dean Metropoulos & Co. is also rumored as an interested party, among prospective reported bidders for Hostess or its individual brands that includes ConAgra Foods ( CAG) and Mexico's Grupo Bimbo. Investment bank Perella Weinberg will be running the sale of Hostess's individual brands, according to a press release from the company, while FTI consulting will coordinate sales of Hostess Brands assets, such as its 33 bakeries and 565 distribution centers. Joshua Scherer of Perella Weinberg said at a bankruptcy hearing Hostess Brands may generate roughly $1 billion from asset sales, highlighting "intense competition" for the company's individual brands.