Atlanta-based Transit Group has filed for reorganization and protection from its creditors under Chapter 11 of the U.S. Bankruptcy Code.

The company's Land Transportation subsidiary, which governs relationships with trucking agents and brokers, is not included in the filing.
Transit Group received approved First Day Orders from U.S. Bankruptcy Court, which authorizes the company to continue operating normally while it restructures, including paying employees salaries and benefits, and payments to owner-operators and agents.
"While Transit has sound operating businesses, the company has a capital structure which it cannot sustain," said Philip Belyew, president and CEO, in a statement. Belyew, noting that the trucking industry has been hit by the economy and skyrocketing insurance costs, said that "while we have made good progress in reducing our overhead costs over the past year, we have determined the best means to secure a strong future for Transit is through a Chapter 11 financial reorganization."
Transit Group is a holding company in the business of acquiring and consolidating trucking companies. Since 1977 it has purchased 19 transportation companies. After buying Fox Midwest and Land Transportation in 1999, signs of trouble cropped up at Transit Group in September 2000, when the company announced its lenders had given the company another 30 days to comply with loan covenants. Soon after, the company announced a management shake-up. In April 2001, the company announced it had taken several steps to restructure debt and recapitalize the company.