Allied says Teamsters term sheet does not meet required concessions; CBA rejection delayed

By Caroline Salls

Pittsburgh, Feb. 14 - Allied Holdings, Inc. told employees and customers Wednesday that a reorganization term sheet submitted by the Teamsters and Yucaipa does not reach the level of concessions the company is seeking, although the Teamsters have agreed to collective bargaining agreement changes that would reduce costs and provide additional free cash flow.

According to an 8-K filing with the Securities and Exchange Commission, while the company and its board of directors is considering the term sheet, Allied has agreed to voluntarily delay the beginning of the court process for its motion to reject the collective bargaining agreement, with the hearing to most likely begin some time after Feb. 23.

Allied said its board of directors has not yet responded to the Teamsters or Yucaipa in connection with the term sheet, and the board is still considering the term sheet.

Since the company's needed concessions are not met by the term sheet, Allied said the board must consider whether to agree to support the union's terms, and, if so, what changes might be necessary in order for the company to support the term sheet.

Further, the company said it must determine what other steps would be required to allow it to emerge from bankruptcy given the fact that the concessions do not meet Allied's needs.

Allied, a Decatur, Ga., distributor of new and used vehicles, filed for bankruptcy on Aug. 1, 2005 in the U.S. Bankruptcy Court for the Northern District of Georgia. Its Chapter 11 case number is 05-12515.

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