Reportedly more than $200 million in debt, Grand Rapids, MI-based trucking company Gainey Corp. and five of its subsidiaries have filed for Chapter 11 bankruptcy protection.
According to The Grand Rapids Press, Gainey owes Wachovia Bank more than $238 million in defaulted loans. The bank sued the trucking company on September 26th to recover the funds.
“The nation’s financial crisis has compelled our lenders, including Wachovia Bank, to make ill-advised decisions based on their own cash constraints,” said CEO Harvey Gainey in a statement. “Those constraints have placed Gainey Corporation and its operating companies in a very difficult situation. Our exhaustive efforts to negotiate a constructive agreement with our lending group have been met with a series of increasingly aggressive actions by these lenders.
“Faced with recent actions by Wachovia Bank, the Company has decided that the only reasonable course that will allow us to serve our customers and preserve jobs is a Chapter 11 reorganization filing,” Gainey added. “Our sound business fundamentals – which include positive cash flow and operating income – will continue to ensure our uninterrupted operations, including paying all suppliers, delivering all freight and meeting our payroll.”