Auto hauler Jack Cooper, which reorganized its debt and became a private company just two years ago, appears to be reorganizing again.
While the company itself has said nothing about a reorganization, the International Brotherhood of Teamsters has published updates on its negotiations on the Teamsters website that described a Jack Cooper filing under Chapter 11 of the Federal Bankruptcy Code as “imminent.”
The Teamsters has received its “Last, Best and Final Offer” as part of a Restructuring Term Sheet being put together through negotiations being conducted by Jack Cooper and its lenders, according to the Teamsters document. The offer, according to the document, would “save more than 2,200 Teamsters job and a total of nearly 3,000 jobs at the company.”
Various “contractual modifications” in the Restructuring Term Sheet are “necessary for the company’s survival in a brutal marketplace,” the Teamsters said.
Since it is a private company, the revenue of Jack Cooper can not be determined. But in 2016, its last full year as a public company before debt issues led to its lenders taking over the company, it reported revenues of approximately $647 million, exclusive of fuel surcharge revenues.
A section of the restructuring term sheet, also provided by the Teamsters on its website, says the existing Jack Cooper Transport Company will be succeeded post-bankruptcy by a “new company” that will be created by the company’s unidentified junior lender “for the acquisition of substantially all of the assets of Jack Cooper and related debtor entities.”
According to the restructuring document, Jack Cooper would remain a signatory to the National Master Automobile Transporters Agreement. There also are no wage or health care benefit concessions in the most recent agreement.
That portion of the restructuring agreement published by the Teamsters includes several provisions aimed at limiting how much the company’s senior management will be able to receive from the new company. For example, CEO T. Michael Riggs is barred from receiving a cash bonus for this year and the two full calendar years following the effective date of the company’s restructuring. The “new” Jack Cooper’s executive committee will not be able to receive more than 5 percent equity in the new company.
The agreement disclosed by the Teamsters also says the new company will be required to invest at least $20 million per year in a new fleet, which it estimated would be 100 vehicles per year through 2023. Jack Cooper’s website put the size of the current fleet at more than 2,000 rigs, but also said it drew that number from a 2015 company filing with the Securities and Exchange Commission, when Jack Cooper was public.
Jack Cooper officials were not immediately available for comment. A phone call to the operator of the main Jack Cooper number was greeted with a recording saying no person was available.