Velocity Express Corporation (“Velocity Express”) and 12 affiliated entities (“Debtors”) filed petitions on September 24, 2009 in the Bankruptcy Court for the District of Delaware for relief under Chapter 11 of Title 11 of the United States Code. The Debtors have moved for joint administration of the Debtors’ cases under case number 09-13294. The Debtors’ petitions and the first day motions are supported by the declaration of Vincent A. Wasik, Chief Executive Officer (the “Wasik Declaration”). The Wasik Declaration clearly identifies the direction of the bankruptcy – the immediate rejection of facility leases and a quick 363 sale.
The Wasik Declaration explains that
The Debtors have one of the largest nationwide networks of time definite logistics solutions in the United States and are a leading provider of distribution, scheduled and expedited logistics services. Our customers are comprised of multi-location, blue chip customers with operations in the healthcare, office products, financial services, commercial, retail & consumer products, transportation & logistics, energy and technology sectors.
The Wasik Declaration identifies three factors leading to the bankruptcy filing:
- [O]ver the past 12 months, the Debtors’ revenues had dropped by approximately 35%.
- Debtors are parties to numerous long-term leases across the country that, absent these bankruptcy cases, they have been unable to shed.
- Debtors are also party to at least ten (10) class actions and have received numerous assessments from state administrative agencies alleging that the Debtors improperly classified individuals as independent contractors rather than employees. While the Debtors dispute these allegations, the financial burden of fighting these claims and paying various settlements has exacerbated the Debtors’ financial struggles.
A listing of the corporate name of each of the Debtors and its case number is provided in the table below. Also provided for each Debtor is its estimated number of creditors, asset value and amount of liabilities as stated in each petition also is provided a table below.
|Debtor Name||Petition Number||Number of Creditors||Estimated Assets||Estimated Liabilities|
|Velocity Express Corporation||09-13294||200-999||$50,000,000 to $100,000,000||$100,000,000 to $500,000,000|
|Velocity Express, Inc.||09-13295||1 to 49||$0 to $50,000||$100,000,000 to $500,000,000|
|VXP Mid-West, Inc.||09-13296||1 to 49||$0 to $50,000||$100,000,000 to $500,000,000|
|Velocity Systems Franchising Corporation||09-13298||1 to 49||$0 to $50,000||$100,000,000 to $500,000,000|
|VXP Leasing Mid-West, Inc.||09-13299||1 to 49||$0 to $50,000||$100,000,000 to $500,000,000|
|CD&L, Inc.||09-13300||1 to 49||$0 to $50,000||$100,000,000 to $500,000,000|
|U-Ship International, Ltd.||09-13302||1 to 49||$0 to $50,000||$100,000,000 to $500,000,000|
|Click Messenger Service, Inc.||09-13304||1 to 49||$0 to $50,000||$100,000,000 to $500,000,000|
|Velocity Express Leasing, Inc.||09-13305||1 to 49||$0 to $50,000||$100,000,000 to $500,000,000|
|Securities Courier Corporation||09-13307||1 to 49||$0 to $50,000||$100,000,000 to $500,000,000|
|Olympic Courier Systems, Inc.||09-13309||1 to 49||$0 to $50,000||$100,000,000 to $500,000,000|
|Silver Star Express, Inc.||09-13311||1 to 49||$0 to $50,000||$100,000,000 to $500,000,000|
|Clayton/National Courier Systems, Inc.||09-13312||1 to 49||$0 to $50,000||$100,000,000 to $500,000,000|
The joint administration of the Debtors’ cases is for procedural purposes only. For substantive purposes, including the exercise by a creditor of any substantive rights, the correct Debtor entity still must be identified. As the first step in assessing this bankruptcy, a supplier, landlord or other unsecured trade creditor should confirm the identity of the entity with whom it did contracted. A supplier should also confirm the identity of the actual recipient of any goods and services provided by the supplier.