ELIZABETH, N.J. — New England Motor Freight (NEMF) Monday said the company and 10 related entities have voluntarily filed for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Jersey in Newark.
In a news release NEMF said it intends to use these proceedings to facilitate an orderly wind-down of its operations.
“We have worked hard to explore options for New England Motor Freight, but the macro-economic factors confronting this industry are significant,” said Vincent Colistra, a senior managing director with Phoenix Management Services and chief restructuring officer for the company.
In a news release, the company said that upon the recommendation of its advisors, NEMF had determined that a Chapter 11 proceeding is the best mechanism to maximize the value of its assets for the benefit of its employees and various creditor constituencies.
Phoenix Management Services is serving as the company’s financial and restructuring advisor.
The following letter was sent to employees Monday from Thomas W. Connery, president and chief operating officer.
“To The Workers of NEMF
“It is with a heavy heart that I am writing this letter to inform you of our intent to undertake a wind down and liquidation of our company, New England Motor Freight.
“The costs of running an asset based trucking company have soared; with labor and benefits consuming an ever large portion of revenue. Add in the high cost of equipment, a severe industry shortage of drivers, ever increasing regulations and tolls, technology investments and the overall risk environment of our business.
“After much discussion as well as consultation with outside financial advisors, it was concluded that it does not make sense to continue operations to support a business in which our margins continue to shrink, thereby resulting in significant financial losses.
“No one is more devastated than our Chairman Myron “Mike” Shevell and his family, namely Nancy, Susan and Zachary. They built this company by walking hand in hand with thousands of dedicated workers like yourself. To all of our co-workers, many of whom are dear friends and to our thousands of customers, the family extends sincere gratitude and they share in our collective sorrow that we could not continue to operate this great enterprise.
“Our cooperate offices and human resources department will provide further information today as we move forward with the wind down.
“Thomas W. Connery
“President and Chief Operating Officer”
New England Motor Freight has long been considered a major player in the Northeast. Published reports said the announcement caught employees, customers and creditors by surprise.
Shevell is the father-in-law of musician Paul McCartney, and his daughter, Nancy Shevell, has held various roles in the company, including vice president.