New Century Files for Bankruptcy, Plans Liquidation
New Century Transportation Inc. has filed for bankruptcy, and the less-than-truckload and truckload carrier intends to sell its assets after closing its doors earlier this week.
New Century, of Westampton, N.J., made its filing in federal bankruptcy court in its home state, two days after telling nearly 1,600 employees that it was shutting down because of funding problems. The filing was made under Chapter 7 of the federal bankruptcy code.
“New Century and its lenders diligently attempted to find solutions to deleverage the company’s balance sheet,” CEO Terry Gilbert said in a statement said. “The best way to maximize value for the benefit of all creditors is to wind down the companies in a bankruptcy proceeding.”
Jefferies Capital, New Century’s primary funding source, declined to comment on Gilbert’s comments when contacted by Transport Topics.
The shutdown at the time of a worsening driver shortage also touched off a rush to hire the company’s driver corps that numbered at least 1,000. Northeast fleets such as New England Motor Freight and competitors received a steady stream of applications.
“This difficult decision follows a comprehensive strategic and financial review of the business,” Gilbert said in a Web posting. “The board of directors has determined that the actions we are taking represent the best alternative under difficult circumstances.”
New Century listed revenue of $266.7 million in revenue last year, including $154.2 million from LTL.
New Century represents the largest failure in more than a year, rivaling the shutdown and bankruptcy of Allied Systems Holdings, a car hauler whose assets were acquired by Jack Cooper Transport, another car hauler. Jack Cooper is ranked No. 53 on the Transport Topics Top 100 list of for-hire carriers in the United States and Canada.
Chairman, Harry Muchlschlegel, started New Century in 2000 after selling Jevic to Yellow Corp. Both companies used a hybrid model, blending TL and LTL services depending on the market, and focusing on chemicals traffic.
WARN Act notices are intended to give workers 60 days notice before a shutdown. Gilbert in a letter to employees said that wasn’t possible in New Century’s case because of the suddenness of the lender’s action.
