Penalized truck firm files for bankruptcy George Transfer cited for safety violations

February 20, 1996|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

George Transfer Inc., the Parkton trucking company that federal regulators shut down last month after repeated safety violations, has filed for bankruptcy protection from creditors, and a lawyer said the company plans to liquidate what is left of its business.

George Transfer and two affiliated companies -- Mack Brothers Inc. and Tri-L Transport Inc. -- filed for court protection under Chapter 11 of the bankruptcy code Friday. Companies in Chapter 11 normally continue to operate while they try to craft a plan to pay creditors and stay in business, but attorney Ken Oestereicher said that's not the case this time.

"What we're contemplating is a liquidation plan for bankruptcy," said Mr. Oestereicher, of the Baltimore firm of Whiteford, Taylor & Preston. "We don't anticipate there will be an operating plan."

A liquidation would complete George's downfall from the 500-driver, 40-terminal trucking player it was as recently as a month ago.

At that time, the Federal Highway Administration's Office of Motor Carriers called the trucking operation "imminently hazardous" and ordered the company to shut down as the agency issued more than 430 complaints of alleged violations of federal regulations, including charges that the company required its drivers to falsify logs intended to keep exhausted truckers off the road.

By Feb. 1, the company had reached a deal to sell its customer lists and its relationship with drivers who own and operate their own trucks under contracts with George to Alabama-based Malone Freight Lines Inc.

Yesterday, Mr. Oestereicher said the deal will not become final until it gets bankruptcy court approval, but he said the drivers are working for Malone under an interim agreement. The bankruptcy proceeding will review the Malone deal and preside over the sale of the rest of the three local companies' assets.

In the bankruptcy filings, George said it has assets of $12.4 million and liabilities of $13.2 million. Mack Brothers has assets of $3.3 million and liabilities of $10.7 million. Tri-L transport has assets of $3.5 million and $11.3 million in debts.

Mr. Oestereicher said much of the debt of the three companies is counted more than once, because one company would guarantee another's obligations.

He said the biggest creditor of the local firms is First Union Corp.

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