Bankrupt Celadon Group is pursuing a deal to sell its Mexican businesses to White Willow Holdings for $2.4 million after the proposed $7 million sale to P.A.M. Transportation Services fell through, according to a court filing.
Luminus Management-backed White Willow “put forth the best offer” for its Mexican subsidiaries, Celadon said in an April 30 filing in U.S. Bankruptcy Court. The deal also provides for 78% of Mexican tax refunds owed to Celadon – worth as much as $18.5 million.
White Willow would acquire 100% of the shares of Celadon Mexicana, Jaguar Logistics and Leasing Servicios, and 75% of the outstanding shares of Transportación and Corporativos.
White Willow also would immediately invest $550,000 after the transaction closes, Celadon said in the filing.
In 2019 Luminus Management acquired a nearly 50% interest in struggling Celadon. Then in January, White Willow purchased Celadon carrier Taylor Express for $14.5 million.
Celadon said in the filing that it pursued a deal with White Willow because P.A.M. sought to negotiate the terms of its non-binding $7 million agreement. The bankrupt firm did not disclose the specifics of its negotiations with P.A.M.
Former P.A.M. CEO Dan Cushman, who retired on May 1 but remains an advisor to the Arkansas-based truckload carrier, was contacted by FreightWaves on Sunday, May 3, but did not immediately respond to the request for comment.
P.A.M.’s offer, made public in February, came before COVID-19 began severely impacting North American freight, including cross-border U.S. Mexico operations. P.A.M reported a net loss of $1.3 million in its first-quarter financial results on April 14.
Celadon has struggled to find a buyer for its Mexican subsidiaries, dominated by carrier Jaguar Transportation since it shut them down in December. Its control over its Mexican operations also came into question when the company disclosed in February that employees in Mexico had restarted some operations after labor disputes.
Celadon filed for Chapter 11 bankruptcy in December.