Preston Trucking Settles Wage Claims

Representatives of bankrupt Preston Trucking Co. agreed to pay $38.3 million to settle wage and benefit claims by some 4,750 former Teamsters-represented employees.

The payment is part of an overall settlement with creditors that was filed in U.S. Bankruptcy Court in Baltimore on Nov. 7, according to Sean Callahan, the former chief financial officer of Preston who has been in charge of selling assets and collecting receivables since the company shut down in July 1999.

Callahan declined to say how much money has been raised to satisfy creditors’ claims, but he said final payments from the Preston estate will probably be made in the first quarter of next year. He also said virtually all of the former Preston workers have found other jobs in the industry.

Under the agreement with the Teamsters union, Preston will pay $18.9 million to cover wages and vacation pay for workers who lost their jobs. Another $19.4 million will go to more than 30 jointly administered multiemployer health and welfare and pension funds.

Teamsters President James P. Hoffa said the settlement “brings justice” to Teamsters members who lost their jobs when the company closed without notice last year. Company officials have said they were forced to cease operations after a financing deal unexpectedly fell through.

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