Jack Cooper Files for Bankruptcy, but Pledges 'Business as Usual'
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Despite filing for bankruptcy, it will be “business as usual” for Jack Cooper Ventures Inc.
The Georgia-based auto-hauling company filed for Chapter 11 bankruptcy protection Aug. 6, according to documents filed in the U.S. District Court for Northern Georgia.
Jack Cooper officials said in a news release the company is undertaking a “comprehensive, court-supervised restructuring that would reduce its debt by more than $300 million and preserve jobs for nearly 2,000 union workers.”
Jack Cooper ranks No. 60 on the Transport Topics Top 100 list of largest for-hire carriers in North America with revenue of $581 million in 2018. It is a specialty transportation and logistics provider, and a major over-the-road finished-vehicle logistics company in North America.
The debt restructuring is not an indication the auto-hauling segment of the trucking industry is in any sort of dire straits, said Guy Young, manager of the Auto Haulers Association of America.
Young told TT he was not familiar with the details of the Jack Cooper filing but said overall the auto-hauling industry is doing well, challenged mostly by finding drivers who can be trained to do the particular job of auto transport. Even if new car sales dip, “I think there’s plenty of cars to be hauled,” Young said.
In announcing its bankruptcy filing, Jack Cooper officials said the company and the Teamsters National Automobile Transporters Industry Negotiating Committee have agreed to modifications to the collective bargaining agreement that will be presented to members for ratification. The modifications will help ensure Jack Cooper’s financial viability and avoid reduction in employee wages or health care benefits, according to company officials.
Jack Cooper officials said the restructuring will allow the company to reinvest significant funds in the business, with the goal of replacing 80% of the fleet with new equipment over the next five years. During the restructuring process, the company will remain focused on serving its customers “and should emerge in an expeditious manner as a stronger business.”
Under the restructuring, the company’s largest lenders have agreed to cancel their debt as part of a transaction to purchase all or substantially all of the company’s assets. The purchase will be subject to a court-approved competitive bidding process, according to the news release.
Jack Cooper officials told Transport Topics that Solus Alternative Asset Management, a New York hedge fund, has committed, along with other creditors, to investing new capital in the restructured company that will enable Jack Cooper to execute plans to maintain normal operations and pay employees and suppliers in the ordinary course of business.
According to court documents and Jack Cooper officials, Solus, a longtime lender to Jack Cooper, would purchase all or substantially all of the company’s assets through a credit bid of existing secured debt and assumption of certain liabilities.
