LTL carrier New England Motor Freight and its subsidiaries have voluntarily filed for Chapter 11 bankruptcy in New Jersey, intending to facilitate an orderly wind down of its operations.
The Elizabeth, New Jersey-based company had fallen on hard times, recording losses in consecutive years as well as “unsustainable rises in overhead,” according to Vincent Colistra, a senior managing director for Phoenix Management Services and chief restructuring officer for the company. Colistra also placed blame on a severe shortage of available drivers in the trucking industry.
Just a week prior to filing, NEMF had implemented a 5.4% general rate increase saying that it was faced with increased costs associated with regulatory mandates, insurance premiums, new equipment and technology advancements.
As a result, the company determined that Chapter 11 would be the best way to maximize the value of its assets for the benefit of its employees and various creditor constituencies.
“We have worked hard to explore options for New England Motor Freight, but the macro-economic factors confronting this industry are significant,” said Colistra. “We have concluded that the Company has no choice but to proceed with an orderly wind-down of operations in a Chapter 11 proceeding.”