One of the largest car haulers in the North American trucking industry has filed for bankruptcy, but company officials say that most employees jobs are safe.
On Tuesday, August 6, Kansas City, Missouri-based auto hauler Jack Cooper Ventures filed for Chapter 11 bankruptcy. The company pointed to pension liabilities and automotive industry challenges as reasons for the bankruptcy, according to the Atlanta Journal Constitution.
Jack Cooper employs more than 2000 workers, most of whom will keep their jobs without a pay cut or loss of benefits, according to company leadership. Most of the company’s employees are union members.
The Chapter 11 bankruptcy is designed to allow Jack Cooper to continue to operate as normal while the company restructures.
According to a Teamster news release, “As was explained on the Monday evening tele-conference with members, we believe this bankruptcy filing is the only opportunity for Jack Cooper to restructure itself – reducing its debt by half, getting new money in the business and limiting its liabilities going forward. If the restructuring is ratified by the members and approved by the bankruptcy court over the next 60 to 90 days, Jack Cooper will emerge as a new company, with new owners, new board of directors and a much healthier balance sheet.”
The restructuring plan is designed to reduce company debt by $300 million, the company says. Per the plan, Jack Cooper’s largest lenders will cancel the company’s debt “as part of a transaction to purchase all or substantially all of the Company’s assets,” making these lenders the new company owners.
Teamsters say that the bankruptcy filing did not come as a surprise and that they had been planning for it since earlier this summer.