The U.S. Bankruptcy Court has approved the sale of Utah-based Simon Transportation Services to Central Refrigerated Service for $152 million.
The sale means 2,300 workers including 1,800 drivers at the failing company, which filed for Chapter 11 bankruptcy in February, will keep their jobs as Central takes over April 22, said Earl Scudder, attorney for Jerry Moyes, majority stockholder in both Simon Transportation and Texas-based Central Freight Lines Inc., which owns Central Refrigerated.
"(Simon's) aim was to keep the operations together and streamline it, and I think we've succeeded," said Daniel Doyle, attorney for Dick Simon Trucking, a subsidiary of Simon Transportation Services.
The company will maintain its headquarters in West Valley City but will manage a smaller fleet of 1,500 tractors and 2,000 trailers, according to Jon Isaacson, chief executive officer of Simon Transportation.
A publicly owned company since 1995, the sale of Simon Transportation to Central will return the company's standing once again to that of a privately held company.
The "Dick Simon" name will remain unchanged through December 2002 but will likely be changed after that, Isaacson said.
Isaacson, along with Rob T. Goates, chief financial officer; and Tork Fulton, vice president of sales, will continue to manage the refrigerated operations.
Dick Simon Trucking specializes in transporting refrigerated cargo mostly food.
The approval of the sale by U.S. Bankruptcy Judge Glen E. Clark occurred after hours of hallway negotiations during Monday's motion hearing between attorneys for Simon Transportation, Moyes and an unsecured creditors' committee.
"How much they (the unsecured creditors) get is undetermined at this point," Doyle said. "They have positioned themselves to get something when they otherwise would have gotten nothing."
The deal involves the sale of $100 million in leased trucks and equipment and another $52 million in other assets to Central, which was created to acquire Simon's assets.
After the bankruptcy filing in February, Dick Simon Trucking laid off about 1,000 workers, including drivers, in an effort to streamline the company's operations, Scudder said.
It reported a loss of $12.6 million for the fourth quarter of 2001 and a loss of $44.7 million for its fiscal year ending Sept. 30.
Simon officials said the nation's economic slowdown resulted in a drop in shipping demand and led to the company's financial woes.
The company also cited a scarcity of qualified drivers and declining market value of used tractors and trailers. It also had problems from acquisition of two trucking companies in fiscal 2001, leading to overcapacity of equipment.
"We are very positive about the reminder of the year," Isaacson said.
Contributing: The Associated Press; Dave Anderton