Ameritruck Files Chapter 11
After filing a bankruptcy petition Nov. 9, the Fort Worth, Texas-based holding company said it will close AmeriTruck Refrigerated Transport, its largest subsidiary, “as soon as practical.” The shutdown could affect up to 1,000 employees.
Last month, Prime Inc., a major refrigerated and dry van fleet in Springfield, Mo., signed a letter of intent to acquire AmeriTruck Refrigerated (TT, 10-12-98, p. 1). Prime executives were not available last week to comment on the status of those plans.
AmeriTruck Distribution said it will ask the U.S. Bankruptcy Court in Dallas for permission to liquidate AmeriTruck Refrigerated’s assets and use the proceeds to pay off debt.
In a statement, AmeriTruck Chairman Michael L. Lawrence said the bankruptcy filing is “in the best interests of our customers, employees and creditors.”
“We regret the impact the decision to liquidate AmeriTruck Refrigerated will have on our customers, employees, suppliers and other business partners,” he added. “However, after a thorough analysis, we have determined that this is the best alternative.
“We think this action provides us with the best opportunity to develop a plan to stabilize AmeriTruck’s operating performance by completing the additional restructuring initiatives, including exiting unprofitable business segments.”
The company retained Price Waterhouse Coopers to assist in formulating and implementing an operating plan and hired investment banking firm CKM Capital to help with liquidity and capital structure needs.
AmeriTruck Distribution’s specialized carrier and regional less-than-truckload groups are generating positive contributions to operating earnings, Mr. Lawrence said. However, AmeriTruck Refrigerated has continued to sustain operating losses despite several restructuring attempts during the past year.
“We have been unsuccessful in our turnaround efforts,” he said. “Severe competitive pressures coupled with higher-than-anticipated operating expenses continue to negatively impact AmeriTruck Refrigerated.”
AmeriTruck Distribution was established in November 1995 and undertook an acquisition growth strategy funded primarily through debt. In recent months, the weak performance by AmeriTruck Refrigerated and high interest payments have caused “severe liquidity problems,” Mr. Lawrence said.
The bankruptcy filing should not affect employees or service in AmeriTruck’s nonrefrigerated segments, he said.
The other units include furniture hauler W&L Services Corp., Hickory, N.C.; medical distribution specialist CMS Transportation Services, Atlanta; short-haul dry van carrier Scales Transport Corp.; freight broker AmeriTruck Logistics Services, Gainesville, Ga.; and regional LTL carrier KTL Inc., Largo, Fla.
