The New Jersey-based less-than-truckload carrier plans for an “orderly wind-down of its operations.”
New England Motor Freight Inc. and 10 of its subsidiaries filed for Chapter 11 bankruptcy protection Monday, and the company intends to use the proceedings to facilitate an “orderly wind-down of its operations,” according to a press release.
The Elizabeth, N.J.-based less-than-truckload carrier owes $35.93 million to its consolidated list of 30 creditors with the largest unsecured claims, which include banks, a union pension fund, logistics companies and fuel distributors, according to the petition filed in the U.S. Bankruptcy Court for the District of New Jersey in Newark.
JP Morgan Chase has the largest unsecured claim at $10.35 million and is one of four banks — including TD Bank ($9.28 million), East West Bank ($5.95 million) and Santander Bank ($4.39 million) — that make up the carrier’s highest unsecured claims.
New England Motor Freight, the country’s 19th-largest LTL carrier, is a unionized carrier with employees represented by the International Association of Machinists union. It reportedly owes the IAM National Pension Fund about $1.68 million in unsecured claims.
Vincent Colistra, a senior managing director with Phoenix Management Services LLC and a chief restructuring officer for the company, said two years of losses along with “unsustainable rises in overhead” and a “severe industry shortage of drivers” led the company to “proceed with an orderly wind-down of operations in a Chapter 11 proceeding.”
“We have worked hard to explore options for New England Motor Freight, but the macro-economic factors confronting this industry are significant,” he said in the press release.
New England Motor Freight, which generated about $400 million in revenue in 2017, operated primarily in the Northeast and Mid-Atlantic with a network of about 35 terminals, 1,300 trucks and 1,500 drivers.
Eastern Freightways, a flatbed and truckload carrier in the Northeast and Mid-Atlantic regions, was among the 10 related subsidiaries that also voluntary filed for bankruptcy.
New England Motor Freight files for bankruptcy
