"We are currently in litigation with one of our major tractor suppliers concerning new equipment purchase prices and tractor repurchase commitments made to us," the company said in its quarterly report. "We initiated this litigation to protect our contractual and other rights."
During a recent conference in New York sponsored by Bear, Stearns & Co., Knight chairman Kevin Knight recently identified Freightliner as the major tractor supplier. Freightliner officials said they would not comment on any pending litigation.
In 1999, Freightliner was one of several companies said to have been generating sales by guaranteeing residual or “buyback” prices for its tractors.
In the meantime, to mitigate any losses, the carrier said it has ordered additional revenue equipment from an alternative supplier and expects deliveries to begin this month.
News sources said Knight would accept 40 to 50 additional tractors from Freightliner, and the alternative supplier for the additional planed purchase of 250 tractors this year.