PrivCo, a company that researches privately-held firms, estimates that at the end of 2011, Hostess had $40.3 million in cash and $1.43 billion in liabilities, including $303 million in debt that came due this year. PrivCo CEO Sam Hamadeh calls these figures a “recipe for a disaster in the making.”

Hamadeh says the company’s “onerous union contracts and its massively unfunded pension obligations” are a big part of the problem. “As of January 2012, Hostess’ pension fund was approximately $2 billion underfunded,” he says.

Hostess is trying to shed some of these obligations via bankruptcy proceedings, but management is finding out that unionized rank-and-file workers aren’t on board with these concessions and want the company to uphold its collective bargaining agreements made in better times. The rising cost of ingredients like flour and sugar also put a squeeze on Hostess’s bottom line.