Likely investor emerges in Gainey case

GRAND RAPIDS, Mich. (WOOD) - A key hearing in West Michigan trucking giant Gainey Corporation's Chapter 11 bankruptcy proceedings was postponed Thursday to allow time for the corporation to work on a possible deal with an outside investor.

A federal bankruptcy judge also ruled that a confidentiality order in the case be lifted, a move that will lead to the release of an extensive investigation into Gainey's operations, including its chief operating officer, Carl Oosterhouse. The report includes references to Oosterhouse's disbarment after stealing tens of thousands of dollars from his then-client, Gainey Corp., and the law firm that once employed him.

Oosterhouse unsuccessfully argued that parts of the report should be redacted, calling those items dated, isolated and irrelevant.

But a creditor attorney pushing for the report's release contended that "just because the information may be sensitive or embarrassing" to Oosterhouse does not mean it should be kept confidential.

Judge James Gregg said "it's time for more sunshine" in the case.

The ruling also means depositions and other documents in the case -- some connected to Oosterhouse's relationship with Gainey Corp. -- will be unsealed, though none of the items were available Thursday.

At issue is the fitness of Oosterhouse to play a prominent role in the company, which filed for bankruptcy protection last fall after a group of lenders led by Wachovia Bank took the trucking firm to court, saying Gainey owed more than $200 million.

Oosterhouse, the now-chief operating officer, would be Gainey Corp.'s sole shareholder under its current post-bankruptcy reorganization plan.

That plan could be altered substantially if the company reaches a deal with Arizona-based private equity firm The Najafi Companies.

Najafi has been in talks to invest in Gainey Corp. since June, according to documents filed in U.S. Bankruptcy Court in Grand Rapids.

The deal would help the firm emerge from bankruptcy protection.

Harvey Gainey told 24 Hour News 8 Thursday he is very optimistic about the potential investment, but stressed there is no final deal in place.

The corporation's lenders expect to see a potential plan for the new investment sometime soon, a Wachovia attorney said in court.

The parties are expected back in court in early August to discuss the possible investment.