Home Truck News Pride Group files for bankruptcy protection to restructure amid lawsuit - Truck...

Pride Group files for bankruptcy protection to restructure amid lawsuit – Truck News

Pride Group Holdings has sought creditor protection under the Companies’ Creditors Arrangement Act (CCAA), after lender Mitsubishi HC Capital America filed a claim this week seeking damages of approximately US$100 million.

Three lawsuits on behalf of the Mitsubishi HC Capital named Sulakhan ‘Sam’ Johal and Jasvir Johal, accusing them of taking out credit lines to build inventories for Pride Truck Sales and Tpine Leasing. It accused them of defaulting on payments they had personally guaranteed. The claims have not been proven in court.

Pride Truck Sales
(Photo: Road Today)

Mistubishi HC Capital Canada, the Canadian arm of the lender, refused comment when asked about the lawsuit the morning of March 28. Later that night, after being asked by TruckNews.com to respond to the lawsuit, Pride Group issued a press release, indicating it had sought and obtained creditor protection under CCAA.

Under the Act, they’ll receive a stay of proceedings for a period of 10 days, subject to extension. The press release says “Certain companies in the Pride Group will file case under the Chapter 15 and Title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware (the “Chapter 15 Cases”) seeking recognition of the CCAA proceedings within the territorial jurisdiction of the United States and other related relief.”

“We have taken these steps to commence the CCAA proceedings and to seek recognition under the Chapter 15 cases so that we can maintain our current operations, stabilize our business, establish governance controls and monitoring, and develop a plan to restructure for the benefit of our stakeholders. We believe this is in the best interests of all of our employees, customers, business partners and other stakeholders,” the company said in the release.

The company said it will be “business as usual” during the proceedings. “We do not anticipate any disruption to the products and services we provide,” it said.

Pride says it will take the time the law affords it to “reorganize and/or restructure its businesses to address short- and long-term goals. We are optimistic and confident that the Pride Group will emerge from these proceedings as a stronger company with stronger overall financial health.”

Pride Group Logistics ranked as the 20th largest Canadian for-hire trucking company in the 2023 Today’s Trucking list of the Top 100 fleets. It operated a fleet of 14 straight trucks, 724 tractors and 2,411 trailers as well as 14 terminals.

Pride Group also ran businesses offering new and used truck and tractor sales, truck leasing, financing, logistics, maintenance and fuel sales. Its founders, Sam and Jas Johal launched the business with one location as a used truck retailer and now operate more than 50 locations in the U.S. and Canada.

“After the pandemic, the North American trucking industry experienced a significant downturn that negatively impacted transportation asset values and increased delinquencies in the leasing business,” the company indicated in its release.

For its part, Hitachi Capital America says Sam and Jasvir Johal personally guaranteed loans it made to the company to fund equipment purchases for Pride Truck Sales and Tpine Leasing Capital in the U.S.

It filed suits from three states – New York, Connecticut, and Illinois – seeking damages of US$89 million, US$2.17 million in New York and Connecticut, respectively. The Illinois claim is unspecified.

Credit: Source link


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