Gainey: 'All people keep their jobs'

GRAND RAPIDS, Mich. (WOOD) - All 2,000-plus employees of Gainey Corp. and its subsidiaries will "keep their jobs" if a saleagreement with an Arizona private equity firm becomes final, founder Harvey Gainey Sr. told 24 Hour News 8 on Thursday night.

That includes Gainey Sr. himself, he said, as well as the company's chief operating officer, Carl Oosterhouse. Gainey Sr. said he would stay on at least three years as chief executive officer and Oosterhouse would retain his title.

Phoenix-based Najafi Companies will own 80 percent of the new Gainey Corp., Gainey Sr. said, but he would not reveal how much the company's creditors would be paid. The company founder would retain 20 percent ownership based on the investment of his own money.

"It's a win-win," Gainey Sr. said. "We're coming out of bankruptcy."

Lawyers for Gainey Corp. and its primary lender announced the "agreement in principle" to sell to Najafi on Thursday before a federal bankruptcy judge. The deal has yet to be approved formally by the corporation's lending group, which took Gainey Corp. to court last fall, claiming it was owed more than $200 million. Weeks later, Gainey Corp. filed for Chapter 11 bankruptcy protection.

A committee of unsecured creditors -- those owed money by Gainey Corp. other than the lending group -- also will examine the deal.

Under its terms, Gainey Sr. said Gainey Corp. and subsidiary Gainey Transportation Services would remain headquartered in Wyoming. The firm's subsidiaries currently located in Florida, Kansas and Kentucky would remain in those places, he said.

Najafi offered to buy the transportation firm three years ago, Gainey Sr. said, but he rejected the deal, a decision he said he regrets.

And the company founder said leaders at Najafi want Oosterhouse to stay with the company. Whether Oosterhouse is fit to serve was one issue raised in the bankruptcy process; he was disbarred after misappropriating funds from Gainey Corp. while working as counsel to the firm. But Gainey Sr. said Najafi leaders had met Oosterhouse and wanted to keep him on board.

How much will the two be paid? Gainey Sr. said they would be paid more than what was allowed by the bankruptcy court, but he would not provide greater detail.

Business at the trucking firm is still down about 30 percent, Gainey Sr. said, but the company still has been generating $20 million to $30 million in revenue per month and has been able to accumulate more than $15 million in cash in the past 10 months.

Najafi is interested in using its cash to expand Gainey Corp.'s operations by acquiring other firms, Gainey Sr. said.

"I'm gaining," he said. "I still have a company that will be very successful in the future."