O & S Bankrupt

Of course there won't be provisions for bankruptcy - but the situation is not unlike Passmore or TRL. In the case of TRL, Rob Low honored purchase contracts that their drivers had. I'm not sure of the details, but I still see some of their tractors being driven by ex-TRL guys (now owners) at our terminals.

 

From the looks of the article, they're not doing a "shutting the doors" bankruptcy, but a re-organization. Depending on whether or not O&O was actually the "financier" of the lease (and the carrier usually has a separate corp that does that), the leases themselves aren't in jeopardy from the chapter 11.

The way the paper reads, O&O is going to be "leasing on" to Prime to generate revenue.

Ch-11 just buys them some time from creditors to (try and) get their act together.

Not like Arrow, who just bailed and left everyone high and dry.

OTOH - this shows either some really pi$$-poor fiscal management - or out and out embezzlement on the part of O&O's officers.

Rick

 

I'm leaning toward embezzlement. The bankruptcy judge should drive by the ex-mayors house and see how he's living. I bet he's not eating PB&J sandwiches and living in a rundown trailer.

 

Yup Pretty easy to pay executive salaries. If you don't pay for fuel,service contracts and trailers. They should pay everyone in full even if the Corp does not survive. Usually these chapter 11 companies cut rates after screwing suppliers.

 

It is not going to matter what the structure is. O&O can have everything passed through to a different corporation and if that company has been given special consideration because the owners have a stack in it the creditors will get a piece of that. Most of these paper companies are set-up for tax purposes. But I suspect that the whole BK was a condition of Prime coming in to save them.

 

Its chapter 11 , so for now creditors will not get paid but employees as well as L/O and O/O's will get paid .

 

Just spoke with a "O&S" lease purchase driver today. They are run under a different subsidiary called "Mega Truck" so I guess that means?????

He couldn't tell me either lol

 

Least he isn't looking for a ride home...

Rick

 

MEGA TRUCK is a service O & S offered with lightweight small bunk tractors

http://www.oandstrucking.com/?page=megatruck

 

It is part of the company so it is involved. Some light reading last night. Over 70% of contracts where in '09 and '10. So they are coming due and likely at low rates. Prime has indicated to the court they will participate but "only without current management" .

Imagine how that conversation went before the filing. "Look guys, we would love to help you out but you all are a bunch of fools so why don't you just hand us the keys and walk away."