New Century files Chapter 7 bankruptcy petition days after abrupt shutdown

By Clarissa Hawes, Land Line staff writer | 6/12/2014

Just days after nearly 1,500 drivers and employees received termination letters informing them the company was shutting its doors, New Century Transportation Inc. and its affiliated companies filed a voluntary Chapter 7 bankruptcy petition in federal court in New Jersey.

In its filing, New Century, as well as Northwind Logistics LLC and Western Freightways LLC, estimate the number of creditors as ranging from 200 to 999, and lists its assets and liabilities as each ranging from just over $10 million to $50 million.

According to court documents, the company estimates that “after any exempt property is excluded and administrative expenses paid, there will be no funds available for distribution to unsecured creditors.”

Since its filing late Wednesday, Catherine E. Youngman has been appointed to serve as the Chapter 7 trustee for all three companies. As of press time on Thursday, June 12, New Century’s bankruptcy filing was incomplete, missing crucial documents including financial statements, as well as a list of its creditors. The incomplete filings are due by June 25, according to the U.S. Bankruptcy Court in Trenton, N.J.

Team drivers Larry and Betty Middleton mainly did drop and hook loads for a dedicated account that took them from Florida to New Jersey every week. He told Land Line on Tuesday, June 10, that he had a slight inkling that something was amiss when he was told that New Century was no longer working with a cartage company he had worked with in the past. Then his fuel card didn’t work for a few days and the company was no longer paying lumper fees when the shutdown was announced.

They say they are anxiously waiting to see if they will receive their paychecks, which they are scheduled to receive on Friday, June 13.

A skeleton crew is still working behind the scenes until Friday to calm customers’ and drivers’ nerves. Many drivers are on their way to return their equipment.

On Wednesday, several trucking companies were on-site interviewing truck drivers for potential jobs as they returned to the lot with their trucks. Recruiters for other trucking companies have been posting potential job openings for New Century drivers on various social media sites.

While many drivers recall the Arrow Trucking shutdown in December 2009, which stranded truckers all across the county, it appears New Century is making sure the fuel cards are still working to get their drivers and their equipment back to headquarters in Westampton, N.J. The drivers have been told they will be paid for every mile they run, but will be on their own to get back home. Some are unsure if they will have the financial means to get back home if they don’t receive their paychecks as promised on Friday.

So far, there have been no confirmed reports that any New Century drivers have been stranded.

New Century hit with WARN Act class action complaint
The day the termination notice was sent to all New Century personnel, one truck driver filed a class action complaint claiming the company violated the Worker Adjustment and Retraining Notification – or WARN Act – as well as the New Jersey Millville Dallas Airmotive Plant Job Loss Notification Act.

According to court documents filed on June 9, the named plaintiff, Robert Kearney, who worked for New Century and previously for Jevic Transportation before it closed, “seeks to recover the greater of 60 days wages and benefits pursuant to the WARN Act, or lost wages, benefits and other remuneration, including severance pay equal to one week of pay for each full year of employment, under the New Jersey WARN Act.

On Wednesday, Land Line spoke with Jack Raisner of Outten & Golden LLP, which is the law firm representing Kearney in the class action complaint against New Century. Raisner is encouraging all employees to go to their website and input their information to be included in the proposed class action complaint.

Jack Raisner said New Century was required by federal and state law to provide its employees with a 60-day notice prior to the shutdown. Instead, employees received their WARN Act letters on the same day their employment was terminated.

According to the New Jersey Department of Labor and Workforce and Development’s website, New Century filed its WARN notice with the state on the same day it closed its doors. The state website also contains important information for former employees and drivers on how to apply for unemployment insurance benefits in New Jersey.

He said the federal WARN Act and the New Jersey WARN Act may provide former employees and drivers with some protection, which the courts will still have to decide. The questions that must be answered include whether the company knew in advance of the shutdown (which may make them liable under the federal and state WARN Acts) or was the depletion of operating capital truly unexpected.

According to the letter the employees and drivers received from Terrence Gilbert, chief executive officer for New Century, the shutdown arose “when NCT’s lender recently and unexpectedly declined to continue funding regular business operations.”

Matt Huber, former outbound dispatcher for New Century, and others said there were some warning signs that the company was in trouble, but none say they were prepared for the news that the company was permanently closing its doors.

“I knew we weren’t real busy at the end so I did think it was odd that we were recruiting new drivers, sending them through orientation, then out on the road with loads, when we already had enough trucks to handle our current freight volume,” Huber told Land Line.

“I feel bad that as the outbound dispatcher I was the last one to meet with the four drivers who left out on Friday with their first and last loads. We just didn’t have a clue this was going to happen.”

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