McLean Officials Answer Creditors at Bankruptcy Meeting
CHARLOTTE, N..C. (AP) _ There is no truth to rumors that McLean Trucking Co. will resurface as a non-union company, says the president of what was the nation’s fifth-largest trucking company.
Instead, McLean is trying to raise more than $100 million through the sale of trucks, terminals and other property to help pay off at least $220 million in debts, company president David J. Wanchick, told creditors in a federal bankruptcy proceeding Wednesday.
″It’s difficult to project, but we hope to generate in excess of $100 million,″ Wanchick said.
Executive vice president David Barnes said the Winston-Salem-based firm owed $55 million to $60 million in secured debt, $15 million to $20 million in priority wage claims and about $150 million in unsecured debt.
Some 200 creditors attended the meeting, which federal bankruptcy law requires so creditors can question debtors. Before the meeting, creditors and lawyers pored over massive stacks of the company’s records displayed on three tables.
Creditors were represented by a 12-member Unsecured Creditors Committee consisting of some of the largest creditors, including the Teamsters Union, a union pension fund and engine, tire and fuel companies.
The largest creditor appeared to be the Central States Southeast and Southwest Areas Pension Fund. Fund lawyers said McLean owes the Teamsters’ fund about $69 million.
McLean filed an emergency request Jan. 10 to reorganize under Chapter 11 of the federal bankruptcy laws and later told the court it would liquidate under Chapter 7.
Wanchick said McLean had served 45 states and employed 10,000 people with 149 terminals, 14,000 tractors and trailers and 26,000 shipments per day in January.
But he said continuing operating losses, worsened by increasing competition in the deregulated trucking industry and banks’ refusal to provide more funds, forced the company to begin terminal bankruptcy proceedings.
″It was felt a liquidation would maximize return to creditors and to employees,″ said Wanchick.
The company moved immediately to secure its assets by completing shipments and returning trucks to the terminals, he said. Efforts were made to collect records and money owed to the company.
Starting Jan. 25, McLean began getting bids on the property it wanted to sell. Wanchick said there was ″very active interest″ in 59 terminals with bids on 26 exceeding the appraised value.
Under questioning from Teamsters attorney Dennis Wilcox, Wanchick said McLean workers took a 15 percent pay cut last year in return for shares in an employee stock ownership plan. He said the cut saved the company some $6 million in wages from Nov. 1.
The stock plan was to have given employees 45 percent ownership of the company, but shares were never allocated and are being held in a trust, said Wanchick. He said the shares are not being considered a claim, but court clerk Mary Holcomb said Teamsters officials had indicated they would contest that.
McLean attorney Joe Kluttz said employee claims for wages, salaries and vacation pay would have priority up to $2,000. He said there were about 9,300 employee claimants and 70,000 other claims, many from vendors.
McLean was founded in 1934 in Red Springs by Malcolm McLean. The Wedge Group, a private Dallas holding company headed by Lebanese investor Issam Farres, bought McLean in 1982 for about $101 million.