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Sirva Bankruptcy
Posted by David Piotrowski
On February 5th, I discussed Allied Van Lines (and Sirva’s) bankruptcy in this post. Today I read an article that discusses how some of Sirva’s creditors are expressing their opposition to the Chapter 11 loan.
Sirva’s unsecured creditors called the moving company’s proposed $150 million bankruptcy loan “unnecessary” and said it shouldn’t be approved. These unsecured creditors feel it gives the secured creditors inappropriate leverage.
Sirva, the parent of Allied Van Lines, will ask the U.S. Bankruptcy Court in Manhattan to sign off on the loan at a final hearing Thursday. The court has already given the company the go-ahead to borrow up to $110 million on the loan pending the final hearing.
It will be intersting to see how the Sirva Bankruptcy pans out. Allied Van Lines is a large household goods moving company, and I wonder if Sirva’s bankruptcy is one of more to come from other large moving companies.
Will the housing downturn also have a major effect on small and medium sized moving companies? What should moving companies be doing now to protect themselves against periodic economic downturns?
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Update May 12, 2008: Sirva to Become a Private Company
Allied Van Lines — Bankrupt!
Posted by David Piotrowski
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Allied Van Lines, one of the largest moving companies in the country, has filed for bankruptcy. The company, which is based in Westmont, Ill., listed assets of $924 million and debts of $1.2 billion. The company has more than 100,000 creditors.
Under the company’s “prepackaged” bankruptcy plan, Sirva’s (Allied’s parent company) lenders will trade a portion of the debt they’re owed for a 75 percent stake in the reorganized company. Existing shares in the company will be canceled. |
Sirva has lined up a $150 million loan to fund its Chapter 11 case and an additional $215 million in financing for when it exits bankruptcy protection. Under the deal, the company’s bankruptcy lenders, led by JPMorgan Chase Bank, will receive an additional 25 percent stake in the reorganized company.
The company said it intends to stay in business during its bankruptcy case and expects to exit Chapter 11 in two to three months.
For additional information, click here. It will be interesting to see the outcome and how Allied Van Lines is able to pull out of their bankruptcy.
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Update May 12, 2008: Sirva to Become a Private Company