OTR Express Closing Doors
May 09, 2001
OTR Express, Olathe, Kan., announced today that it is going out of business.
The dry van truckload carrier will cease operations within 60 days because of "adverse business conditions" - the soft freight market, high fuel costs, high insurance costs and declining used truck and trailer values. With these factors keeping OTR Express from being profitable in the foreseeable future, and a lack of capital, OTR Express will shut down operations and liquidate.
The company will continue pickup and delivery of loads for customers until further notice.
Bill Ward founded OTR Express in 1985 as a one-truck operation with his wife Kathy and Richard Walpole. In late 1999, it announced it planned to convert half its fleet to owner-operators
as part of a plan to return to profitability. Three months ago, it announced plans to downsize its fleet
and cut more than 100 jobs.
"In recent months, we have explored many different alternatives to help OTR Express recover," said Ward, president and CEO, "but we continue to face weakening freight demand, high fuel prices, higher insurance costs and deterioration in asset values because of the depressed truck and trailer market. In spite of some positive impact from restructured loan payments and our recent fleet and staff downsizing, we can no longer foresee a successful outcome in this environment. We have lost money the past seven quarters. The company has not been able to return to compliance with certain covenants on our working capital line of credit, and we have not been able to comply with our current agreement with equipment lenders. The Board, after management consultation with secured lenders, felt the best decision at this time was to wind the operations down and apply the company's remaining resources to cover existing liabilities."
The company predicts that it won't have enough funds left after liquidation to fully pay unsecured creditors, and warns stockholders to not expect any distributions in the liquidation.