A federal appeals court in Philadelphia last month endorsed an agreement among stakeholders of Jevic Transportation Inc. to toss the trucking company's bankruptcy case out of court before a formal chapter 11 exit plan was approved, Reuters reported yesterday. Known as "structured dismissals," such agreements usually occur when all creditors agree on how to divide a debtor's assets. In the Jevic case, though, the dismissal benefited only a few creditors, including private equity owner Sun Capital, while leaving out laid-off drivers entirely. New Jersey-based Jevic was acquired by Sun for around $80 million in a 2006 leveraged buyout, and was bankrupt by 2008. Thanks to a lien on a loan guarantee, Sun was also Jevic’s senior-most creditor, along with CIT Group, which financed the buyout. When Jevic went bankrupt and fired about 1,800 truck drivers, Sun and CIT held all the cards, claiming entitlement to the $1.7 million left in its coffers. A committee of unsecured creditors, including vendors to whom Jevic owed unpaid bills, sued Sun and CIT for more than $100 million, alleging that they saddled the company with too much debt. To settle, CIT paid $2 million to cover the committee's lawyer fees, while Sun surrendered the $1.7 million for the creditors themselves. But the agreement left nothing for the truck drivers, who had asserted $8.3 million in wage debts entitled to payment ahead of the committee.
