Performance Transportation seeks access to cash collateral following DIP facility termination

By Caroline Salls

Pittsburgh, June 17 - Performance Transportation Services, Inc. is seeking emergency access to cash collateral to fund its wind down and protect the collateral securing its debtor-in-possession financing after the DIP facility was terminated in connection with a Teamsters strike, according to a Tuesday filing with the U.S. Bankruptcy Court for the Western District of New York.

Although the court approved rejection of the company's collective bargaining agreement with the Teamsters' National Master Automobile Transporters union, Performance said the union employees began an illegal strike on June 9.

On June 11, the company received a notice of default on the DIP facility prompted by the strike.

The DIP facility was subsequently terminated, and payment of all of the loans was accelerated.

As a result, Performance said it ceased operations on June 13. Three separate motions have been filed asking the court to convert the company's Chapter 11 case to Chapter 7 bankruptcy for liquidation.

Performance said it needs access to $250,000 in cash collateral for costs associated with securing the DIP collateral, as well as additional amounts needed to satisfy payroll obligations for its Canadian entities.

The cash collateral access will expire on the date the company's Chapter 11 case is converted.

Performance Transportation Services, a Detroit-based transporter of new automobiles, sport utility vehicles and light trucks, filed for bankruptcy on Nov. 19, 2007. Its Chapter 11 case number is 07-04746.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.