One of Canada’s biggest trucking carriers has filed for bankruptcy protection after lender Mitsubishi HC Capital America filed a lawsuit seeking $100 million.
Pride Group filed Thursday for creditor protection under the Companies’ Creditors Arrangement Act (CCAA) in Canada, which gives the company a stay of proceedings for at least 10 days.
“We have taken these steps to commence the CCAA proceedings and to seek recognition under the Chapter 15 cases so that we can maintain our current operations, stabilize our business, establish governance controls and monitoring, and develop a plan to restructure for the benefit of our stakeholders. We believe this is in the best interests of all of our employees, customers, business partners and other stakeholders,” the company said in a news release.
The bankruptcy protection filing came after Mitsubishi HC Capital filed lawsuits accusing the Pride Group’s Sulakhan “Sam” Johal, president and CEO, and Jasvir Johal, vice-president, of defaulting on payments they had personally guaranteed, according to TruckNews.
Mitsubishi HC Capital is seeking damages of $100 million in the lawsuits.
Mississauga, Ontario-based Pride Group is a North American truckload carrier operating a fleet of 391 tractors and 1,200 trailers with terminals in Ontario, Quebec, Alberta and Illinois.
Pride Group acquired Texas-based truckload carrier Arnold Transportation Systems in 2022. The acquisition increased Pride Group’s transportation assets to 805 trucks and 2,600 trailers in Canada and the U.S.
Along with Mitsubishi HC Capital, more than 20 other lenders have filed claims totaling $637 against Pride Group, according to filings with the U.S. Bankruptcy Court for the District of Delaware. They include Daimler Truck Financial Canada ($193 million), Daimler U.S. (US$69.7 million), Paccar Financial ($46.9 million), and Volvo Financial Services Canada ($9.8 million).