Heavy-equipment hauler ENTREC received court approval to find buyers or investors under creditor protection as it remains operating in Canada and the U.S. with extended financing.
Canada-based ENTREC will have until Aug. 7 to either sell off assets or secure investors after Alberta Justice Barbara Romaine approved its plans under the Companies’ Creditors Arrangement Act (CCAA), a process similar to U.S. Chapter 11 bankruptcy.
The company also secured interim financing of up to C$30 million (about US$21.8 million) from its largest creditor, a syndicate led by Wells Fargo. Sequeira Partners and Ernst & Young Orenda will serve as sales agents to market ENTREC to prospective buyers and clients.
The company’s plans may hinge on its Chapter 15 bankruptcy case in the United States. A hearing at the Bankruptcy Court for the Southern District of Texas on Thursday may determine if the cross-border cases can be administered from Canada.
CEO John Stevens warned in an affidavit that divorcing the U.S. operations into a separate bankruptcy proceeding would be harmful.
“If the debtors are forced to liquidate their assets as a result, many jobs will be lost to the detriment of the debtors’ employees and their families,” Stevens said in an affidavit filed on Tuesday in U.S. bankruptcy court. “… Creditors who lose the race to the courthouse will be left with no recovery on their claims.”
Courts in the U.S. and Canada typically defer to the jurisdiction where the largest proceeding takes place. In ENTREC’s case, the majority of its operations, assets and debts are Canadian.
ENTREC specializes in transporting oversized and overweight equipment in addition to providing crane services. It operates through Alberta-based Capstan Hauling and ENT Oilfield Group, and Texas-based ENTREC Cranes & Heavy Haul.
The company has about 370 employees, 115 tractors, and 125 cranes and picker trucks.
ENTREC filed for creditor protection in Canada on May 14.