Allied Systems Holdings Files for Bankruptcy Protection
June 11, 2012
Allied Systems Holdings Inc. and 18 of its subsidiaries, including Allied Automotive Group Inc., Axis Group Inc., and Allied's Canadian units, filed for Chapter 11 bankruptcy protection on June 10.
The Georgia-based auto hauler says all operations are expected to continue as normal throughout this financial restructuring process. Allied's majority lenders have committed to provide up to $20 million in debtor-in-possession financing to support the company. The financing is subject to court approval.
"We believe the financial restructuring will strengthen Allied's balance sheet and position the Company for a long and profitable future," says Mark J. Gendregske, president and CEO.
Allied previously filed for Chapter 11 protection in July 2005. Since emerging in May 2007, the company's sales have been adversely impacted by the reduction in vehicle production and sales due to the global economic crisis that began in 2008. Additionally, Allied and its majority lender Yucaipa have been in litigation with certain minority lenders since 2009. Two of those lenders filed involuntary Chapter 11 proceedings against Allied on May 17, 2012.
Allied says its terminals and locations will continue to operate as usual, and employees will continue to be paid without interruption.