In In re Interstate Bakeries Corp., 2013 U.S. App. LEXIS 1663 (8th Cir. Jan. 25, 2013), the Eighth Circuit affirmed the district court’s ruling that Hostess’ failure to provide a COBRA notice to a terminated employee did not cause the employee to suffer a sufficient degree of prejudice to be entitled to recovery of statutory penalties. The employee was terminated in 2006 during Hostess’ bankruptcy. The company failed to provide COBRA notice and continued the employee’s coverage under the company’s health plan for two years before discontinuing it. The employee filed an administrative claim in the Hostess bankruptcy proceeding, claiming, among other things, that he was entitled to statutory penalties for Hostess’ failure to provide him with a COBRA notice. The bankruptcy court granted Hostess’ motion for summary judgment, finding that the two years of free medical coverage minimized the prejudice experienced by the employee and that there was no enforcement purpose to a statutory award because Hostess acted in good faith. The district court affirmed the ruling. The Eighth Circuit affirmed the district court’s ruling, reasoning that COBRA does not mandate penalties be issued in every case where gaps in coverage occur and in this case it was appropriate to rely on the bankruptcy court’s discretion in deciding whether to award statutory penalties.