NationsWay Hubs to Be Sold; Wage Lawsuit Filed by Workers

Officers of bankrupt NationsWay Transport Service have agreed to sell three of the carrier’s hubs — in Commerce City, Colo.; Harrisburg, Pa.; and Phoenix — to two of the country’s less-than-truckload giants. The facilities are scheduled to be sold on Sept. 7 at federal bankruptcy court in Phoenix.

Meanwhile, a group of unsecured creditors has asked a court to put a trustee in charge of the liquidation of NationsWay. Also, a Colorado lawsuit has been filed under that state’s Wage Claim Act, asking that about $10 million in unpaid wages, plus a 50% penalty, be paid to the 3,500 employees who lost their jobs when the company went under.

NationsWay, formerly one of the country’s largest privately held LTL carriers, filed for Chapter 11 bankruptcy protection on May 20, catching many of its customers and employees by surprise. Its officials said the company could no longer compete with smaller, mostly nonunion carriers. (5-31, p. 1)

The bankruptcy process has sparked discord between NationsWay and the committee representing its unsecured creditors, who number among them the carrier’s 3,500 former employees. The Official Committee of Unsecured Creditors filed a motion July 15 to convert the proceeding to a Chapter 7 bankruptcy, which would put a trustee in charge of the liquidation.

The bankruptcy lists unsecured debt of $2.3 million owed to Central States Southeast and Southwest Pension Fund, which administers the Teamsters pension funds for truckers covered under the National Master Freight Agreement. It also shows $3.8 million owed to National Fire Insurance Co. of Hartford and $6.4 million to the Western Conference of Teamsters.

The agreements between the Denver-based debtor and the buyers of the terminals are not binding, since another company could come in with a higher bid at the auction.

According to Philip Rudd, a NationsWay attorney, the following transactions have been agreed to:

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The Commerce City hub would be sold to American Freightways of Harrison, Ark., for $6 million.

li>The Harrisburg facility would also be sold to AF for $3.25 million.

li>The Phoenix terminal would be sold to Consolidated Freightways of Menlo Park, Calif., for $6.55 million.

They are not done deals,” Rudd stressed. “These sales are subject to higher and better bids.”

For the full story, see the Aug. 30 print edition of Transport Topics. Subscribe today.