Gainey files for bankruptcy

GRAND RAPIDS, Mich. (WOOD) -

On the heels of a $238 million loan default, Gainey Transportation Services filed for Chapter 11 bankruptcy Tuesday.

The Grand Rapids-based trucking company filed for protection under four different corporate entities in federal bankruptcy court in the Western District of Michigan.

The filing lists the corporation as having between 200 and 999 creditors to whom it owes money.  It estimates the company's assets at anywhere from $100 million to $500 million, which is also the amount it says it owes.

Under bankruptcy protection, all creditor action, lawsuits, garnishments and claims for property against Gainey is stopped. It promotes the negotiation of a new loan payment plan, and it freezes assets on those loans.

According to bankruptcy attorney Alan Bennett, the parties get to vote on it. "And if it's not passed by the parties or approved by the judge, they get sent back to do a new plan and try to come up with one that will be approved."

Bennett said this filing "doesn't change anything for the average employee. Assuming Gainey has, or will soon, obtain permission to keep running its businesses, they need employees to do that."

The filing also gives Gainey time to sell assets and come up with a plan to reorganize.

Truck drivers for Gainey Transportation have watched the lawsuit filing and are watching the Chapter 11 filing with some worries. They want to make sure they will still get paid.

"I've worked for people who have filed bankrupcy before , other trucking companies, and never saw a nickel out of it," driver Tom Caton told 24 Hour News 8. "And I'm really worried about this one."

Caton also fears that if the company runs out of cash he could get stuck out on the road without any gas.

In an interview with 24 Hour News 8's Suzanne Geha, Harvey Gainey said his company does have cash on hand, there have not been problems with payroll, and employees will continue to get paid.