William B. Cassidy, Senior Editor | Jun 11, 2012 5:41PM EDT
Allied Systems Holdings filed for Chapter 11 bankruptcy protection from creditors June 10, saying it would keep its auto-hauling trucks rolling as it reorganizes.
The car hauler billed the bankruptcy proceeding as the final phase of a restructuring plan aimed at reducing expenses and eliminating corporate debt.
In a statement, Allied Systems said its terminals and locations will continue to operate as usual, and employees will be paid without interruption.
Allied said its majority lender committed to provide up to $20 million to keep the company and its 18 subsidiaries running, including Allied Automotive Group.
With more than 2,400 tractor-trailers, Allied Automotive delivered more than 2.5 million cars, trucks and SUVs in 2011, the company said.
"The $20 million financing package we have arranged is more than sufficient to support our ongoing operations,” said Mark J. Gendregske, president and CEO.
The U.S. Bankruptcy Court in Delaware must approve the filing.
The Teamsters union said it would “monitor the situation at Allied carefully” to protect the interests of Teamster car haulers at Allied’s subsidiary carriers.
“Our message to our members remains the same: keep working as usual,” Roy Gross, director of the Teamsters Car Haul Division, said Monday.
This is the second time in 10 years Allied has filed for Chapter 11 protection. The company declared bankruptcy in 2005 and emerged in 2007 as Allied Systems.
The Chapter 11 filing and $20 million financing deal follow involuntary Chapter 11 proceedings against Allied filed by two of its minority lenders last month.
Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter at @wbcassidy_joc.
