Wind Down of Multi-State Trucker in Chapter 11 Pays Lenders 100%

Jevic

Delanco, New Jersey

Challenge

Trucking company (LTL) with locations across the East Coast. $200 million sales. $60 million debt.


  • Fuel surcharges could not keep up with quickly rising fuel prices, lag time cost over $3 million in a single month
  • Rolling stock was scattered across the country
  • PE sponsor firm not willing to fund capital and bank group not willing to fund losses
  • Increased competition, especially from the former owner and rising fuel prices, caused extreme pressure on margins.
  • Combined with a recent purchase by a Private Equity firm, who highly levered the company, a liquidity crisis occurred.
  • The bank group had concern over the value of the collateral and did not wish to continue to fund losses.

Solution

  • MorrisAnderson worked with management to develop a restructuring plan.
  • With losses mounting, the company determined that liquidation was the only option and the company filed for Bankruptcy.
  • MorrisAnderson and the company worked with employees to insure delivery of product and return of all rolling stock equipment.
  • By guaranteeing wages and most outstanding health care payments, product was delivered and equipment returned.

Results

  • The orderly wind down resulted in 100% of all equipment returned.
  • The auctions were highly successful, resulting in the secured creditors being paid 100%.
  • Negotiated and settled L/C for Worker’s Comp and Liability for $750K increase in cash to the company.
  • Final resolution of bankruptcy case became a famous Supreme Court case regarding the use of the Absolute Priority Rule.

Daniel F. Dooley

Dan Dooley, CTP, is a Principal and CEO at MorrisAnderson based out of Chicago. He has a strong national reputation in crisis management, operations improvement, debt refinancing/restructuring and C-level positions. He is a frequent speaker at industry conferences and a regular author for industry periodicals. Dan has served on the Board of Directors of both Read More