Allied Systems Holdings, a longstanding Atlanta automotive transportation company that has been trying to restructure in the face of declining business and high costs, is back in Chapter 11.
Allied and 18 subsidiaries voluntarily filed for bankruptcy protection last week after three lenders filed an involuntary Chapter 11 petition against the company in May. Allied hasn't been paying the interest on loans from those lenders since 2009, and the total debt has now reached $274 million.
Allied's majority owner, Yucaipa Cos., which is responsible for the loans, is embroiled in an ongoing lawsuit with those lenders.
Allied president and CEO Mark Gendregske said in a statement, "We believe the financial restructuring will strengthen Allied's balance sheet and position the company for a long and profitable future."
In July, Allied is expected to ask a federal court for final approval of a $20 million loan from Yucaipa to Allied. A federal judge last week gave interim approval to Allied's request for the financing.
Gendregske said court approval "will enable Allied to continue operations as normal throughout the restructuring."
Allied, whose roots date to 1934, previously filed for Chapter 11 protection in July 2005. A reorganization plan was approved and implemented in 2007. A final decree in that case was entered earlier this month.
Since the reorganization plan was approved, the company's business has been hurt by the economy-related decline in auto production and sales. The company transports cars and trucks from manufacturers to dealerships.
Its biggest customer is Ford. It also does business with other automobile manufacturers, including Mazda, Kia, Honda and Nissan.
Allied had revenues of $543 million in 2010, but that figure fell to $343 million in 2011. The company has 1,835 employees.
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