The dismantling of Comcar following its filing for Chapter 11 bankruptcy protection last month got a boost this week with court approval to sell refrigerated carrier MCT to White Willow Holdings.
According to bankruptcy documents from the court in Delaware, the sale price of MCT will be $2,254,500. A closing date was not specified in the court document.
The sale of South Dakota-based MCT needed bankruptcy court approval to ensure there were no higher offers than that put forth by White Willow, a private equity firm backed by New York investment house Luminus Management LLC.
“Based upon the record before the Court, the Purchaser’s offer for the Acquired Assets, as embodied in the Purchase Agreement, is the highest or otherwise best offer for the Acquired Assets,” the court ruling said.
In the original bankruptcy filing in May, MCT was described as a reefer and dry van company. At the time, it was described as having 41 employees at five terminals, 129 drivers, 135 trucks, 88 owner-operators, 315 reefer trailers and 263 dry vans.
In the bankruptcy document, MCT was said to have suffered a 25.8% decline in revenue during 2019 compared to 2018.
Although a potential sale to White Willow was disclosed by Comcar in its original press release, the statement on the bankruptcy by the company’s chief risk officer, Andrew Hinkelman, said only that Comcar had signed a purchase agreement “through a private sale,” without mentioning White Willow specifically. The Hinkelman document also said Comcar was “aware that a few other potential purchasers have expressed interest in MCT.”
It also noted that Comcar had a fiduciary duty to seek out other buyers who might pay more.
The emergence of a higher bidder evidently did not occur and the court’s action cleared the way for the sale of MCT to White Willow.
As far as how many employees will stay on, the sales agreement between the two companies, which is in the court document, says that White Willow “shall make commercially reasonable efforts to offer employment to all employees and drivers.”
Five days before closing, White Willow will be required to provide Comcar a list of the employees that the new owners would like to retain. The buyer is also expected to make “reasonable efforts” to keep employees at their current location, at the same base wage or hourly rate and with benefits that are “substantially comparable” to what they have now.
White Willow also has been active in trying to pick up assets from the bankruptcy of Celadon. A recent attempt to purchase Celadon’s Mexican assets fell through.
The other sales that Comcar announced at the time of its bankruptcy filing were flatbed hauler CT Transportation to be acquired by PS Logistics, and chemical carrier CTL Transportation to be acquired by Service Transport Co. (STI).
(Correction: An earlier version of this story incorrectly reported that a White Willow attempt to purchase Taylor Express from Celadon had fallen through. That was not accurate. White Willow did purchase Taylor Express.)
More stories by John Kingston can be found here.