Gainey May Exit Bankruptcy With New Owner

August 07, 2009

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In an effort to escape bankruptcy, Gainey Corp., Grand Rapids, Mich., is negotiating with Phoenix-based Najafi Company to become the majority owner.
According to published reports, the company has come to agreement with its lender to repay its outstanding loans through the sale.

Harvey Gainey, chief executive of the trucking company he founded in 1984, also has paid $6 million to buy back his stake in his company, which filed Chapter 11 bankruptcy protection in October of 2008.

In October, the company filed for bankruptcy protection after being sued by lender Wachovia. The company owed more than $242 million to creditors.

In June, Gainey filed a restructuring plan that involved creating a new company, referred to as "Newco" in court documents, which would lease Gainey Corp.'s old trucks and trailers. Creditors would get any money made off the leases as well as profits from selling off the trucks and trailers. The new company would buy or lease additional rolling stock and could make offers on its old assets during liquidation.

Harvey Gainey drew criticism for taking money out of his company as loans, all of which he says was in the open.

Gainey told Michigan's WZZM 13 that all current employees will keep their jobs.

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