Mega Carrier Celadon Group to File Bankruptcy, Cease Operations

[Sinister]

Another thing to watch will be to see what happens with lease purchase drivers. Do the lease trucks go through the main company, or all through a separate company?

I know in the case of ATS it was a "separate company" creatively named "Competitive Leasing". It's in the same building as the rest of ATS in St Cloud, but on paper it's a separate outfit. I've heard Prime is the same way. Maybe @ironpony can confirm or deny that. I imagine most big companies that do a lease purchase thing have the leasing company broke away from the main company on paper.

I know in the case of Arrow, a lot of those guys were eventually contacted by the title holders and were offered financing terms on their own. I think that was for people near paying off their tractors anyway.

 

[Mike]

not only that, but what will happen to those L/O's..?? will it ding thier credit for turning in the trucks before lease end? will they still have to pay the lease even if the trucks are seized?

No. Trucks don’t belong to them, nothing to be reported to credit. They just end up losing their investment into the truck if it is part of the bankruptcy.

 

[Mike]

I know in the case of ATS it was a "separate company" creatively named "Competitive Leasing". It's in the same building as the rest of ATS in St Cloud, but on paper it's a separate outfit. I've heard Prime is the same way. Maybe @ironpony can confirm or deny that. I imagine most big companies that do a lease purchase thing have the leasing company broke away from the main company on paper.

I know in the case of Arrow, a lot of those guys were eventually contacted by the title holders and were offered financing terms on their own. I think that was for people near paying off their tractors anyway.

Prime has always had this under a different company name. Even then, though, if the main company is going bankrupt, there is lots of risk in regards to keeping your truck.

 

[Sinister]

Prime has always had this under a different company name. Even then, though, if the main company is going bankrupt, there is lots of risk in regards to keeping your truck.

What did Pumpkin do? Was everything handled through SFI or do they just sell the trucks?

I have to go finish some drywall mud.

Everyone shut up for a while.

 

[ironpony]

not only that, but what will happen to those L/O's..?? will it ding thier credit for turning in the trucks before lease end? will they still have to pay the lease even if the trucks are seized?

It depends on a couple of things... mostly the title. If the title is in the LO's name then it's going to depend on the contract language and the payment history. If the LO can arrange adequate financing, he's good to go.

If the title is in Celedon's name, its part of the bankruptcy. The LO can petition the court, but they're so far down the food chain its doubtful they'd get the truck.

 

[Nomad1]

It depends on a couple of things... mostly the title. If the title is in the LO's name then it's going to depend on the contract language and the payment history. If the LO can arrange adequate financing, he's good to go.

If the title is in Celedon's name, its part of the bankruptcy. The LO can petition the court, but they're so far down the food chain its doubtful they'd get the truck.

I think if the title is in the LO name they will be top of the list to get that truck. I certainly wouldn't hand one over to someone if my name is on the title. I would find a way to work it and make payments until a court ordered me to turn it over. I would probably appeal that order also. Myself if I were in that situation I would be sitting in my attorneys office today.

 

[Nomad1]

I'd rent a car. That way I can bring all my stuff with me, go directly home, stop when I need to, and more importantly, NOT stop when I don't need to.

Lots of drivers have guns too. You can't fly with guns unless you jump through hoops and then the government knows you have it.

A whole carrier goes down like this and you can almost bank on being able to split the rental costs and gas with someone who lives near you too.

Hell I would drive the truck home. They owe these drivers paychecks. They can send someone for the truck when they have paid me what they owe me and reimbursed me for any out of pocket expenses of getting the truck home.

 

[Electric Chicken]

I know in the case of ATS it was a "separate company" creatively named "Competitive Leasing". It's in the same building as the rest of ATS in St Cloud, but on paper it's a separate outfit. I've heard Prime is the same way. Maybe @ironpony can confirm or deny that. I imagine most big companies that do a lease purchase thing have the leasing company broke away from the main company on paper.

I know in the case of Arrow, a lot of those guys were eventually contacted by the title holders and were offered financing terms on their own. I think that was for people near paying off their tractors anyway.

US Xpress even leases from itself via separate company.

It's so that IF the freight company goes tits up, they still have assets to start over.

 

[ironpony]

I think if the title is in the LO name they will be top of the list to get that truck. I certainly wouldn't hand one over to someone if my name is on the title. I would find a way to work it and make payments until a court ordered me to turn it over. I would probably appeal that order also. Myself if I were in that situation I would be sitting in my attorneys office today.

So, your personal car has the title in your name. You're saying if the dealership that sold it to you hoes bankrupt, they can take your car?



That's not how it works...

I know in the case of ATS it was a "separate company" creatively named "Competitive Leasing". It's in the same building as the rest of ATS in St Cloud, but on paper it's a separate outfit. I've heard Prime is the same way. Maybe @ironpony can confirm or deny that. I imagine most big companies that do a lease purchase thing have the leasing company broke away from the main company on paper.

All of Prime's trucks are owned by Success Leasing Inc, which is a separate legal entity from New Prime Inc, the trucking company. Success leased the company controlled trucks to New Prime. The LO trucks were leased to the LO from Success on one contract, and the the LO signed a second contract with New Prime.

It's all owned privately by Robert Low.

 

[Electric Chicken]

So, your personal car has the title in your name. You're saying if the dealership that sold it to you hoes bankrupt, they can take your car?



That's not how it works...



All of Prime's trucks are owned by Success Leasing Inc, which is a separate legal entity from New Prime Inc, the trucking company. Success leased the company controlled trucks to New Prime. The LO trucks were leased to the LO from Success on one contract, and the the LO signed a second contract with New Prime.

It's all owned privately by Robert Low.

Serious question. Why is it "New" Prime?

 

[Nomad1]

So, your personal car has the title in your name. You're saying if the dealership that sold it to you hoes bankrupt, they can take your car?



That's not how it works...



All of Prime's trucks are owned by Success Leasing Inc, which is a separate legal entity from New Prime Inc, the trucking company. Success leased the company controlled trucks to New Prime. The LO trucks were leased to the LO from Success on one contract, and the the LO signed a second contract with New Prime.

It's all owned privately by Robert Low.

No. I'm saying they can't take my car. I would continue to work it until all legal appeals have been exhausted. I would not just hand over my asset. If my name or my company name is on the title then in this state I am the legal owner. I am free to do with it what I wish. I can sell it before I allow the courts to repo it.

 

[GAnthony]

Serious question. Why is it "New" Prime?

i think it had something to do with the lawsuit(s) they had gone thru from the leasing fiasco? (truth in lending laws???) they just renamed themselves "New" and retained the name Prime.

 

[389 Hood]

Serious question. Why is it "New" Prime?

It used to be when Prime was an all O/O company, that if you passed a Prime truck, or a Greyhound bus, you were seriously speeding.

Prime now is an embarrassment of it's former self.

 

[ironpony]

i think it had something to do with the lawsuit(s) they had gone thru from the leasing fiasco? (truth in lending laws???) they just renamed themselves "New" and retained the name Prime.

Absolutely not. They have always run a clean program, with the usual butthurt feelings from folks who don't have a clue.

Serious question. Why is it "New" Prime?

Prime Inc ran into financial trouble when a recession hit right after they started an expansion. I think this was 1987. With one or the other, they would have been OK, but both together was too much. Rob filed chapter 11, killed off the old Prime Inc, and reorganized as New Prime Inc dba Prime Inc. The financing he got allowed him to keep it a private company.

It used to be when Prime was an all O/O company, that if you passed a Prime truck, or a Greyhound bus, you were seriously speeding.

Prime now is an embarrassment of it's former self.

That was back when 80% of their business was with FedX. And yeah, to meet their contract obligations they were dang fast. "Prime Time" was after midnight with wide open trucks spec'd for speed. They had a lot of accidents in those days. When I started with them, they were limiting the lease trucks to 76, and I had one of the last 65 mph company trucks.

So fast forward to recently... Swift got in trouble because of all of their accidents, and had to come to some sort of merger with Knight to stay afloat. Prime figured that one out, and started limiting truck speed. In '09 they cranked it down some more before fuel prices spiked.

You may not like not being able to chase the wind in a big truck, but it has its costs. A lot of companies went bankrupt after '09 because of uncontrolled fuel costs.

 

[Mike]

What did Pumpkin do? Was everything handled through SFI or do they just sell the trucks?

I have to go finish some drywall mud.

Everyone shut up for a while.

Schneider Finance (SFI) is their separate company that handles this. These folks, at least. Allow you to move your truck to another company.

 

[ironpony]

Schneider Finance (SFI) is their separate company that handles this. These folks, at least. Allow you to move your truck to another company.

If you're close to the end of a lease, Prime may do that, but the payment has to come off the top of your settlement.

 

[Mike]

If you're close to the end of a lease, Prime may do that, but the payment has to come off the top of your settlement.

The thing to remember, though, with Prime, Schneider, or anybody else that doesn’t include your name on the title, if the main company goes under, their little umbrella leasing company is gonna be pulled down the drain with them as well almost immediately.

Seeing a big company like Celadon go down is enough for me to never consider a lease purchase again.

 

[ironpony]

The thing to remember, though, with Prime, Schneider, or anybody else that doesn’t include your name on the title, if the main company goes under, their little umbrella leasing company is gonna be pulled down the drain with them as well almost immediately.

Seeing a big company like Celadon go down is enough for me to never consider a lease purchase again.

That is the risk.

 

[GAnthony]

Absolutely not. They have always run a clean program, with the usual butthurt feelings from folks who don't have a clue.



Prime Inc ran into financial trouble when the 2nd or 3rd Reagan recession hit right after they started an expansion. I think this was 1987. With one or the other, they would have been OK, but both together was too much. Rob filed chapter 11, killed off the old Prime Inc, and reorganized as New Prime Inc dba Prime Inc. The financing he got allowed him to keep it a private company.



That was back when 80% of their business was with FedX. And yeah, to meet their contract obligations they were dang fast. "Prime Time" was after midnight with wide open trucks spec'd for speed. They had a lot of accidents in those days. When I started with them, they were limiting the lease trucks to 76, and I had one of the last 65 mph company trucks.

So fast forward to recently... Swift got in trouble because of all of their accidents, and had to come to some sort of merger with Knight to stay afloat. Prime figured that one out, and started limiting truck speed. In '09 they cranked it down some more before fuel prices spiked.

You may not like not being able to chase the wind in a big truck, but it has its costs. A lot of companies went bankrupt after '09 because of uncontrolled fuel costs.

well not knowing how old you are or your length of time in the business, but decades ago, there was a huge debacle on the truth in lending laws, and the lease/purchase programs.

way back when, i had applied to the various companies, Greenfield Express, Schanno, Don Frymiller, Arctic Express, and yes of course, Prime.. (this was all done by snail mail, and phone calls as there wasn't any internet back then, let alone people with personal desktop pc's...)

Prime was the only company at the time, to send me a drivers settlement sheet, so i could see what he earned, and what they automatically deducted. (no other company, complied with my requests, only thing they wanted, was for me to fill out a bank application for a lease/purchase deal, on brand new equipment, save from Don Frymiller, who had nothing but high mileage garbage to be leased.

i went thru that sheet, line by line, and in the end, i saw that working as a company driver, i was 1000% better off, and actually made more money, with company paid health benefits as well..

one by one, those companies fell under various lawsuits, again, the truth in lending laws as i said.

i think only Prime and Don Frymiller survived, that fiasco..i am not sure if Schanno still exists however.

this is the reason why i said the reason why Prime called itself, "New Prime".....

OOIDA v. New Prime, Inc.

Fighting for the rights of truckers and providing truck industry related benefits, services, rebates, insurance on trucks, education and tools for the trucking industry in grain valley, missouri and beyond.

www.ooida.com

 

[Sinister]

Holy crap I forgot all about Schanno...