Preston Creditors Get Hearing

BALTIMORE — Creditors of bankrupt Preston Trucking Co. filled a room last week at the U.S. Trustee’s office here to learn more about how the liquidation of company assets is proceeding and to have the chance to question the three principals on a range of topics related to the less-than-truckload carrier’s demise.

The 40 people in attendance represented only a tiny fraction of the 10,000 creditors who hope for some money when Preston’s Chapter 11 bankruptcy proceeding is completed.

The nation’s 28th-largest trucking company closed its doors without notice July 27 after it was unable to get additional cash advances from its chief lender, Congress Financial Corp. of New York, said Preston officials.

“We were out of cash,” said Preston President David Letke at the hearing. “We were overdrawn on our payroll and payables accounts, and we had received our maximum advance from Congress.”

On July 15, 1998, Yellow Corp., which had acquired Preston in 1993 for $24 million, sold the unionized carrier for $100 to three company executives: Letke, Chief Operating Officer Nick Marino and Chief Financial Officer J. Sean Callahan.

Yellow, based in Overland, Kan., was able to write off $100 million in debt and received a $20 million tax benefit from the write-off.

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