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Comcar Industries announced May 17 it is filing for Chapter 11 bankruptcy protection and plans to sell its five operating companies as part of the legal process.
In its bankruptcy filing in Federal Court in Wilmington, Del., the company said it had assets of $66.7 million and liabilities of $85.6 million.
Chief Restructuring Officer Andrew Hinkelman also said in the filing the goal was to preserve as many jobs as possible.
“The sale of substantially all assets of the company through a Chapter 11 process is in the best interests,” he said. “The alternative was certain liquidation and loss of the company’s 950 jobs.”
According to the filing, the company lost $25 million last year and $6 million this year through early March.
One of the divisions that Auburndale, Fla.-based Comcar is selling is being sought by White Willow Holdings, which played a prominent role in the bankruptcy of Celadon Group earlier this year. Celadon is an Indianapolis trucking company that is in the process of liquidating.
Four of the companies to be sold are trucking firms and one is a truck repair and parts distribution company.
In a statement on its website, Comcar said it had reached separate agreements to sell its flatbed company, CT Transportation, to PS Logistics of Birmingham, Ala. That company is a full-service logistics operation with more than 2,000 flatbed assets, vans, step decks/RGNs (removable gooseneck trailers), a brokerage and transportation management division, dedicated fleet operations and a brokerage division.
With 1,665 company-owned tractors and 1,485 owner-operator tractors, PS Logistics ranks No. 49 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
Liquid bulk carrier CTL Transport is being sold to Service Transport Inc. of Houston. Service Transport hauls liquid chemicals bulk, dry bulk, asphalt, liquid petroleum and tank wash. The company has 305 power units, according to the Federal Motor Carrier Safety Administration.
In addition, refrigerated and dry van carrier MCT Transportation will be sold to White Willow Holdings, a Newfields, N.H.-based private equity company that offered $14.5 million to purchase Taylor Express in January. Taylor Express is the last operating trucking company that was part of Celadon.
The company also announced it has entered into a letter of intent to sell two other divisions, CCC Transportation and Commercial Truck Trailer Services, to undisclosed buyers. CCC Transportation is a bulk carrier that includes dry van, intermodal, dedicated fleets, logistics and retail direct delivery services. CTTS is a full-service tractor and trailer parts and repair shop.
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Comcar said on its website it has more than 40 terminal and satellite locations nationwide and that it operates in the 48 contiguous states.
“Our decision to file Chapter 11 was to better enable us to find homes for our customers, people and assets. Prior to this decision, we worked diligently to find a solution that would reduce our debt, enhance our liquidity, and best position all Comcar holdings for the future,” the company senior management team said on the website.
Comcar is using Section 363 of the Federal Bankruptcy Code in what is a prepackaged bankruptcy. Under the code, the companies that have agreed to buy Comcar’s assets are said to be “stalking horses,” and it is possible they could be outbid for those assets as the auction process moves forward in court.
Bankruptcy attorney Jim Van Horn with law firm Barnes and Thornburg told TT the Section 363 process allows for the paying down of as much of the debt as possible.
“They are selling their assets, the business units of the company, in order to satisfy their debt obligations,” he said. “And it may not meet all of their debt obligations. They’ll get whatever they get in the marketplace.”
Comcar said in its statement that it intends to keep operating during the bankruptcy proceedings.
“This process will allow our companies to continue operating in the ordinary course of business while the sales process for each one continues. We believe this will best maintain opportunities for our people, continue to serve our customers and maintain vendor relationships.”
The move to file for bankruptcy comes less than two months after the company’s newly appointed CEO, Randy Clark, 60, died unexpectedly in Hilton Head, S.C.
An official with the company told TT the bankruptcy is not related to Clark’s death.
Clark had been hired in November after serving as a trucking industry consultant and as CEO of Towne Transportation, a less-than-truckload and expedited company. He also had served as CEO of Streamlite and was in senior management roles at DHL and Polar Air Cargo.
Privately held Comcar was founded in 1953 as Commercial Carrier Corp. and was last sold in 2016. The company said at the time it was one of the largest privately owned companies in the transportation industry.
Comcar had more than 2,000 employees and annual revenue of $227 million, according to TT data.
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