CTS files Chapter 11
A bankruptcy judge will hold a final hearing Feb. 9 on an emergency order issued to Cargo Transportation Services after the Florida-based trucking company filed for Chapter 11 protection.
On Jan. 21, Judge Michael Williamson of the U.S. Bankruptcy Court, Middle District of Florida, signed interim orders that included CTS’ motion use of cash collateral and granting post-petition financing, according to court records.
The Florida-based truckload and less-than-truckload carrier’s services include distribution, warehousing and logistics. CTS, along with its non-debtor affiliates, CTS Tennessee and Cargo West, have 140 employees and annual gross revenue of $100 million.
In May, CTS and its affiliates executed a master revolving note for $10.15 million with Comerica Bank, a Texas-based financial services company. The company had amended and restated a $10 million promissory note from September 2009.
CTS charges that Comerica, because of “technical, nonmonetary defaults that are disputed by CTS,” seized its bank accounts and began collecting CST’s accounts receivables, which totaled $1.7 million. When CTS petitioned the court Jan. 12 for Chapter 11, which allows reorganization of debts and a court-approves payment plan, $6.4 million remained on that debt.
The company plans to borrow $2 million from Comerica to pay for operating expenses and administrative costs. The bankruptcy will have “no impact” on daily operations, CTS stated.