CF files Chapter 11 paperwork

Sept. 4, 2002
Consolidated Freightways Corp. (CF) filed for Chapter 11 bankruptcy as expected yesterday, and said one of its immediate goals is to complete in-transit customer deliveries as quickly as possible. The third-largest LTL carrier yesterday ceased most U.S. operations. However, the CF AirFreight, Canadian Freightways Ltd. and Grupo Consolidated Freightways S.A. de RL subsidiaries continue to operate as
Consolidated Freightways Corp. (CF) filed for Chapter 11 bankruptcy as expected yesterday, and said one of its immediate goals is to complete in-transit customer deliveries as quickly as possible.

The third-largest LTL carrier yesterday ceased most U.S. operations. However, the CF AirFreight, Canadian Freightways Ltd. and Grupo Consolidated Freightways S.A. de RL subsidiaries continue to operate as usual.

CF also filed its Form 10-Q with the Securities and Exchange Commission and reported revenues of $482.4 million and an operating loss of $53.9 million, after a write-off of approximately $11 million of internal-use software that the company will not use due to its bankruptcy filing. These results follow the previous quarter's operating loss of $30.9 million on revenues of $463.0 million.

Since the company is no longer considered a going concern, CF also recorded an additional $62.6 million in valuation allowance against net deferred tax assets, which constituted more than half the quarter's net loss of $123.2 million.

In its Form 10-Q report, CF said the bankruptcy petition is necessary because of substantial operating losses in the prior 18 months and the resulting impact on liquidity, letter-of-credit, and surety bond requirements to support the company's self-administered insurance programs.

The company reported assets of approximately $783.6 million and liabilities of approximately $791.6 million.

CF also said today that it believes stockholders are unlikely to receive any money for their shares as a result of its Chapter 11 filing.

The company said in its Form 10-Q filing that it is unlikely that it will be able to fully satisfy the claims of creditors from the proceeds of any sale or liquidation, which means there will likely be no money available for distribution to stockholders.

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Tim Parry

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