EXHIBIT 99.1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
NEWNAN DIVISION
IN RE: CHAPTER 11
ALLIED HOLDINGS, INC., ET AL. CASE NOS. 05-12515 THROUGH 05-12526
AND 05-12528 THROUGH 05-12537
DEBTORS. (JOINTLY ADMINISTERED)
JUDGE DRAKE
DEBTORS' EMERGENCY MOTION FOR INTERIM RELIEF
FROM COLLECTIVE BARGAINING AGREEMENT
PURSUANT TO SECTION 1113(e)
Allied Holdings, Inc. and its affiliated debtors and
debtors-in-possession(1) (collectively, "Allied" or the "Debtors") respectfully
submit this emergency motion (the "Motion") for interim relief from certain
provisions of the collective bargaining agreement ("CBA") between certain of the
Debtors and the Teamsters National Automobile Transporters Industry Negotiating
Committee and Local Unions 5, 20, 25, 41, 63, 79, 89, 115, 120, 135, 222, 251,
299, 312, 326, 327, 332, 355, 364, 385, 390, 391, 414, 449, 490, 492, 509, 512,
528, 542, 560, 568, 579, 592, 604, 612, 614, 631, 651, 710, 745, 822, 848, 891,
917, 957, 961 and 984, all affiliated with the International Brotherhood of
Teamsters in the United States (collectively, the "United States Teamsters"),
pursuant to Section 1113(e) of the Bankruptcy Code (the "Motion"). In support of
this Motion, the Debtors respectfully represent as follows:
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(1) Allied Automotive Group, Inc., Allied Systems, Ltd. (L.P.), Allied Systems
(Canada) Company, QAT, Inc., RMX LLC, Transport Support LLC, F.J. Boutell
Driveaway LLC, Allied Freight Broker LLC, GACS Incorporated, Commercial
Carriers, Inc., Axis Group, Inc., Axis Netherlands, LLC, Axis Areta, LLC,
Logistic Technology, LLC, Logistic Systems, LLC, CT Services, Inc., Cordin
Transport LLC, Terminal Services LLC, Axis Canada Company, Ace Operations, LLC,
and AH Industries Inc.
SUMMARY OF FACTS
The Debtors require immediate interim wage relief from the United States
Teamsters to assist the Debtors with their short-term survival. By May 2006, the
Debtors project a liquidity shortfall of approximately $700,000, and by July
2006 (which is Allied's seasonal downturn), the Debtors project a shortfall in
liquidity of approximately $3 million. However, the Debtors believe that the
business requires positive availability of approximately $8 million to allow the
business to operate without a high degree of risk of a liquidity failure,
meaning that the Debtors require additional liquidity of $8.7 million in May and
$11 million in July. As the Court is aware, based on the financial information
for the fiscal year ended December 31, 2005, and the financial information for
the fiscal months ended January 31, 2006 and February 28, 2006, the Debtors
notified the DIP Facility Lenders (as defined in the Final DIP Order) that they
would be in default of certain financial covenants, including EBITDA covenants.
Further, the Debtors advised the DIP Facility Lenders that, absent cost
reductions and other actions, further defaults in certain future months would
occur. The Debtors have been successful in obtaining two forbearance agreements
from the DIP Facility Lenders, with the current forbearance to expire on April
18, 2006.
The default of various financial covenants, including EBITDA covenants, by
the Debtors would vest the DIP Facility Lenders with an option to foreclose on
their collateral, absent the forbearance agreements which have been entered into
by the Debtors and the DIP Facility Lenders. Foreclosure on the Debtors'
collateral which has been pledged under the DIP Facility (as defined in the
Final DIP Order), if exercised, would risk the potential liquidation of the
entire business of the Debtors. The DIP Facility Lenders have agreed to forbear
from exercising this remedy through April 18, 2006.
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Since the execution of the forbearance agreements, the Debtors have been
in discussions with the DIP Facility Lenders regarding a further extension of
the forbearance agreement and an amendment to the DIP Facility to provide the
Debtors the additional liquidity to meet the shortfall that is projected to
occur by May 2006 and again by July 2006. After extensive discussions with the
DIP Facility Lenders over the past several weeks, the DIP Facility Lenders have
indicated that they may be willing to provide the Debtors with $5 million of
additional availability to help fund the Debtors' projected cash flow deficit
which is projected to occur by May 2006, provided that the $5 million of
availability must be repaid within 30 days unless extended by the DIP Facility
Lenders. However, the DIP Facility Lenders are not willing to provide additional
adequate availability to fund the Debtors' projected cash flow in July 2006
citing, among other reasons, the execution risks associated with the current
United States Teamster negotiations. Instead, in connection with an extension of
the forbearance agreement or an amendment, the DIP Facility Lenders have
indicated that they will require the Debtors to present and implement a plan to
fund the estimated liquidity shortfall in July 2006. The Debtors' plan to fund
this shortfall requires that the Debtors successfully reduce their labor costs
as requested herein.
In reviewing their limited options, the Debtors have determined that they
must obtain an immediate 10% wage reduction from their Teamster bargaining
employees in the United States while imposing (i) a mandatory five-day, non-paid
furlough for all of their North American non-bargaining employees whose annual
wage is less than $80,000 which must be taken in the month of June 2006,
constituting an approximately 2% reduction in the wages of such employees, and
(ii) two mandatory five-day furloughs for all of their United States
non-bargaining employees whose annual wage is $80,000 or more, which constitutes
approximately a 4% reduction in their wages, at least 5 days of which must be
taken by
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the end of May 2006 with the balance taken by the end of June 2006. These
furloughs will result in approximately $200,000 of cost reductions to the
Debtors in May and $800,000 of cost reductions in June of 2006. The wage
reductions for the Teamster employees in the United States as requested herein
would result in cost reductions of approximately $2.0 million per month,
assuming that they are implemented May 1, 2006. These wage reductions for all
affected employees, while regrettable, are necessary to avoid irreparable damage
to the Debtors' estates and are essential to the Debtors' continued operations.
The wage reductions are one component to the Debtor's plan to eliminate
the liquidity shortfall projected to occur in July 2006. The balance of the
Debtors' plan to cover the liquidity shortfall includes seeking, among other
things: to defer capital spending; terminate certain non-bargaining retiree
benefits; collect debtor funds tied up in certain split-dollar insurance
policies; and otherwise provide the Debtors with liquidity needed to continue
their operations. While the Debtors' plan eliminates the liquidity shortfall,
the Debtors will still be operating with minimal availability, leaving them at
risk. Further, the Debtors must accelerate their efforts to obtain permanent
concessions in their CBA with the United States Teamsters prior to July 2006
when the industry's seasonal downturn occurs and Allied's liquidity is at its
lowest level.
JURISDICTION
1. This Court has jurisdiction to consider this Motion pursuant to 28
U.S.C. Sections 157 and 1334.
2. Consideration of this Motion is a core proceeding pursuant to 28 U.S.C.
Section 157(b). Venue of this proceeding is proper before this Court pursuant
to 28 U.S.C. Sections 1408 and 1409. The statutory predicate for this Motion is
11 U.S.C. Section 1113(e).
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BACKGROUND
3. On July 31, 2005 (the "Petition Date"), each of the Debtors filed a
voluntary petition for relief under Chapter 11 of Title 11 of the United States
Code (the "Bankruptcy Code"). The Debtors are authorized to operate their
businesses as debtors-in-possession pursuant to Sections 1107 and 1108 of the
Bankruptcy Code.
4. Allied is likely the largest transporter of new and used vehicles in
North America. Its business operations fall into two main categories. The
largest category of business operations is providing "short-haul" delivery
services for new vehicles over a distance averaging less than three hundred
miles. These short-haul vehicle delivery services fall within the business
operations of Allied Automotive Group, Inc. and its direct and indirect
subsidiaries, which use specialized tractor-trailer units known as "Rigs" to
transport the vehicles. The other category of business operations is providing
various support services with respect to vehicle transportation and
distribution. These support services fall within the business operations of Axis
Group, Inc. and its direct and indirect subsidiaries. In general terms, the
Debtors' need for bankruptcy relief is the result of a continuing pattern of
decreasing revenues, primarily caused by a decrease in new vehicle production at
its largest customers, increasing expenses related to their aging fleet and
essential maintenance and the consequent difficulty of servicing debt and
maintaining adequate liquidity.
RELIEF REQUESTED
5. The Debtors request that this Court enter an order providing for a 10%
compensation reduction for the United States Teamsters on a temporary basis.
This request for interim relief is made to maintain the Debtors as a going
concern and to obtain cash needed to assist the Debtors in meeting the projected
operating shortfall in May and again in July. The
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Debtors will also impose reductions for the Debtors' non-bargaining employees in
their North American operations. The Debtors' non-bargaining employees in North
America have previously had numerous wage and benefit reductions imposed upon
them by the Debtors including through mandatory, unpaid furloughs in 2001, 2002,
2003 and 2004. The Debtors' bargaining employees in Canada will be unaffected by
this Motion.
A. THE DEBTORS' STEPS TO RETURN OPERATIONS TO A PROFITABLE LEVEL
6. Both prior to and after the Petition Date, the Debtors have taken a
number of significant steps in an attempt to return Allied to a profitable level
of operations. The steps include, but are not limited to:
a. Securing a $230 million DIP Facility,
b. Obtaining price increases and fuel surcharge relief from their
major customers,
c. Significantly reducing compensation levels of non-bargaining
employees, including reductions in benefits, freezing of a pension plan and
requiring mandatory, non-paid furloughs,(1)
d. Selling non-core assets, such as the stock of Kar-Tainer and the
ventures in the United Kingdom and Brazil,
e. Closing non-performing terminal operations,
f. Rejecting unprofitable contracts, including severance agreements,
and
g. Significantly reducing non-bargaining staff levels.
7. Despite all of these efforts, the Debtors were unable to meet their
post-petition financial projections, in part due to lower than projected volumes
of vehicles for the Debtors to
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deliver for the Debtors' primary customers (General Motors and Ford),
unexpectedly high maintenance and repair costs for an aging fleet of Rigs, and
increased costs for essential insurance coverage during the 2006 policy renewal.
B. The Debtors' Immediate Liquidity Concerns
8. Under the Debtors' current financial projections, the Debtors
anticipate a shortfall in liquidity of approximately $700,000 in May 2006 and
approximately $3 million in July 2006. However, the Debtors believe that the
business requires positive availability of approximately $8 million to allow the
business to operate without a high degree of risk of a liquidity failure,
meaning that the Debtors require additional liquidity of $8.7 million in May and
$11 million in July. The Debtors have already made, and continue to make,
significant reductions with respect to expenses. For example, in addition to the
pre-petition expense reductions, the Debtors are freezing all company travel
(which will save approximately $150,000 per month), will be deferring capital
needed for their aging fleet of Rigs and will be seeking to terminate certain
non-bargaining retiree benefits (which will save approximately $100,000 per
month).
9. The Debtors have also explored very carefully any opportunities for
increasing their pricing for services provided to their customers. The Debtors
will continue to look for ways to maximize revenue, as they have in the past,
but it is unrealistic to expect short-term increases in pricing or customer
shipment activity in order to solve the cash problem the Debtors project over
the coming months, particularly during the industry's seasonal downturn in July.
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(1) The Court heard extensive evidence of the Debtors' non-bargaining employees'
sacrifices at the hearing to approve the Key Employee Retention Plan. At that
hearing, the United States Teamsters' own witness admitted that the Debtors'
non-bargaining employees have already sacrificed wages and benefits in an effort
to assist the Debtors.
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10. While the Debtors have not reached an agreement with their DIP
Facility Lenders, the Debtors have entered into extensive negotiations with the
DIP Facility Lenders and presently believe they will be able to obtain $5
million of additional availability from these lenders, which the Debtors believe
will fund the projected cash flow shortfall in May. The Debtors will be required
to implement a plan to fund the estimated liquidity shortfall to occur in July.
As a component of this plan, the Debtors must successfully reduce labor costs as
requested herein in order to cover the projected liquidity shortfall in July.
Failure of the Debtors to obtain the liquidity needed to operate their
businesses would vest the DIP Facility Lenders with an option to foreclose on
the Debtors' collateral, including their fleet of Rigs, which are needed by the
Debtors to be able to continue to operate.
11. The interim relief sought herein would require all United States
Teamsters to take a 10% reduction in current compensation and to forego a
scheduled June 1, 2006 wage increase and cost of living adjustment. This would
result in approximately a $2.0 million per month savings to the Debtors assuming
the wage reductions take effect May 1, 2006. With the cost reductions to be
imposed on the Debtors' non-bargaining employees in North America if this Motion
is granted, the Debtors will save approximately $200,000 per month in the month
of May and $800,000 in June.
C. THE PROPOSED INTERIM MODIFICATIONS TO THE CBA
12. TO AVOID irreparable harm, the Debtors must obtain an immediate 10%
reduction in current compensation from the United States Teamsters in addition
to avoidance of the June 1, 2006 scheduled wage increases and cost of living
increases under the applicable CBA. Certain Debtors employ two main types of
individuals represented by the United States Teamsters: (1) drivers, yard
personnel, and maintenance employees; and (2) owner-operators. The necessary 10%
will be achieved with the first group (drivers, yard personnel, and maintenance
employees) through a 10% decrease in their current wages. Because of the manner
in which they are compensated, the necessary
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10% overall reduction will be achieved with the second group (owner-operators)
through a 2% decrease in their percentage share of revenue, the net effect of
which is approximately the same as a 10% reduction in overall compensation as
for the first group.
13. Although the Debtors intend to pursue and hope to obtain an
agreed-upon collective bargaining agreement with the United States Teamsters
reflecting necessary cost reductions, there is no guarantee that those efforts
will be successful.(2) More important, because of the projected cash shortfall
in May and July 2006, the Debtors require immediate compensation reductions to
assist the Debtors in obtaining the cash liquidity to meet the projected
shortfall in July. In addition, the Debtors require the $5 million of additional
availability which they are attempting to obtain from the DIP Facility Lenders
in order to meet the projected short-fall in May 2006.
14. The Debtors have made themselves available to the United States
Teamsters upon request and are scheduled to meet with Teamster representatives
today, April 13, 2006, to begin bargaining on the Debtors proposed modifications
to the current CBA. The Debtors have already provided much of the relevant,
responsive, non-confidential information requested by the United States
Teamsters and have offered to provide the United States Teamsters with the
relevant, responsive confidential information subject to an appropriate
protective order. The Court issued such an order yesterday. The Debtors provided
some of this confidential information to the Teamsters today and will provide
the remainder promptly.
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15. Should the Debtors not obtain the interim relief requested in this
Motion, or should the Debtors be unable to achieve appropriate cost reductions
in their CBA, they project that they would have such low liquidity by July that
there would be insufficient funds to operate the Debtors' businesses. In such a
situation, the Debtors further project that they would be in default under the
DIP Facility and that the DIP Facility Lenders could foreclosure on their
collateral which would push the Debtors into liquidation and out of business.
16. Thus, by not taking action to preserve cash now, the Debtors would be
imperiling the future employment of all of their employees, and putting at risk
the potential recoveries available to all other stakeholders. Accordingly, the
interim relief sought herein is essential to the continuation of the Debtors'
business.
BASIS FOR RELIEF
A. THE APPLICABLE LEGAL STANDARD
17. Generally, Bankruptcy Code Section 1113 governs a debtor's ability to
modify or reject its collective bargaining agreement while its bankruptcy case
is pending. Bankruptcy Code Section 1113(e) provides that:
If during a period when the collective bargaining agreement
continues in effect, and if essential to the continuation of the
debtor's business, or in order to avoid irreparable damage to the
estate, the court, after notice and a hearing, may authorize the
trustee to implement interim changes in the terms, conditions,
wages, benefits or work rules provided by a collective bargaining
agreement. Any hearing under this paragraph shall be scheduled in
accordance with the needs of the trustee. The implementation of such
interim changes shall not render the application for rejection moot.
11 U.S.C Section 1113(e).
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(2) The Debtors have made a proposal (the "Section 1113 Proposal") for necessary
modifications to the CBA, to create a new five-year CBA with an expiration date
of May 31, 2011.
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18. Section 1113(e) is a "stop-gap measure" created to allow a debtor to
carry on its business, without irreparably damaging the estate, while the
parties to a CBA attempt to negotiate. See, e.g., In re United Press Int'l,
Inc., 134 B.R. 507 (Bankr. S.D.N.Y. 1991); Beckley Coal Mining Co. v. United
Mine Workers, 98 B.R. 690, 694 (D. Del. 1988) (stating that Sections 1113(e)
seeks "to preserve the business, if possible, for the benefit of all"); In re
Russell Transfer, Inc., 48 B.R. 241, 244 (Bankr. W.D. Va. 1985) (noting that
Section 1113(e) allows the court to impose a "temporary stop gap arrangement"
while the parties negotiate pursuant to the other provisions of Section 1113).
19. Section 1113(e) provides that while a CBA "continues in effect," after
notice and a hearing, a court may authorize the implementation of interim
changes to the terms, conditions, wages, benefits, or work rules provided by a
CBA if such changes are "essential to the continuation of the Debtors' business,
or in order to avoid irreparable damage to the estate." Thus, in considering
whether to grant a section 1113(e) motion, a court must determine if the
proposed changes either (A) will "avoid irreparable damage to the estate," or
(B) are "essential to the continuation of the Debtors' business." Because the
standard is disjunctive, a debtor need only show that one of the two criteria is
met.
B. THE REQUESTED INTERIM MODIFICATIONS MEET THE STATUTORY REQUIREMENTS OF
Section 1113(E)
20. The Debtors' liquidity is at a critically low level, threatening
continuation of the business. Under the circumstances, the Debtors can show that
the requested interim modifications will "avoid irreparable damage to the
estate," and are "essential to the continuation of the Debtors' business."
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1. WITHOUT RELIEF, THE DEBTORS WILL SUFFER IRREPARABLE HARM
21. If the Debtors cannot obtain additional liquidity during the next
couple of months, there is a high probability that they will suffer irreparable
harm to their asset base and ongoing business, resulting in material downsizing,
massive layoffs and potential liquidation by July 2006.
22. While the Debtors have searched for, and implemented, cost reductions
in every way possible, and explored all other means to preserve cash during this
interim period, the only possible way to reduce cash out-flows to the necessary
levels is to implement immediate wage reductions for all of the Debtors' United
States bargaining employees as requested herein, implement wage reductions
through unpaid furloughs for all United States non-bargaining employees and
otherwise obtain additional liquidity through additional borrowings and through
the Debtors' business plan. The reductions to labor costs requested herein will
reduce the Debtors' costs by $2.0 million per month, and the mandatory unpaid
furloughs for employees not represented by the Teamsters will reduce the
Debtors' costs by an aggregate of $1 million in May and June. Accordingly,
certain of the Debtors are seeking immediate interim modifications in their CBA
with the United States Teamsters that would reduce current compensation by 10%
and avoid June 1, 2006 scheduled wage increases and cost of living increases.
23. These modifications, if imposed, will assist the Debtors in bridging
the estimated $3 million liquidity shortfall in July 2006. While the Debtor's
plan eliminates the liquidity shortfall, the Debtors will still be operating
with minimal availability, leaving them at risk of further liquidity crises.
24. The Debtors hope that, prior to the hearing on this Motion, they can
immediately obtain the consent of the United States Teamsters to the proposed
interim modifications. If they
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cannot, however, the Debtors will be required to ask this Court to impose the
interim modifications that they have requested pursuant to Section 1113(e).
25. Based on the relevant cases, the risk to the Debtors' business if the
relief sought herein is denied certainly suffices to warrant interim relief
under Section 1113(e). As in In re Almac's, 159 B.R. 665, 666-67 (Bankr. D.R.I.
1993), here, "given the undeniable alternative of a complete loss of all jobs by
the union employees, as well as the nonunion management staff . . . the lesser
of the two evils is most definitely the proposed" modifications. See also UFCW
Local 770 v. Official Unsecured Creditors Comm. (In re Hoffman Bros. Packing
Co.), 173 B.R. 177, 185 (9th Cir. B.A.P. 1994) (agreeing that pursuant to
Section 1113(e) debtors are allowed to temporarily modify their CBAs "in the
case of emergency").
2. INTERIM MODIFICATIONS UNDER SECTION 1113(E) ARE ESSENTIAL FOR THE
DEBTORS TO CONTINUE IN BUSINESS
26. If the interim relief sought herein is not granted, the Debtors' cash
available for operations will fall so low that any disruption of revenues or
increase in costs could immediately cripple or permanently disrupt the Debtors'
business operations. Further, the Debtors project that without the relief sought
the Debtors will be unable to pay their obligations as early as July 2006 even
if the Debtors successfully obtain $5 million of additional liquidity through
borrowings from the DIP Facility Lenders. Interim relief may be granted where
such relief is "essential to the continuation of the debtor's business." 11
U.S.C. Section 1113(e).
27. The Debtors have recently defaulted on various financial covenants in
their DIP Facility and are operating under a forbearance agreement. Without the
interim relief, the Debtors will not be able to comply with the financial
covenants contained in the DIP Facility as currently constructed or with amended
DIP covenants which the Debtors are negotiating to
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obtain from the DIP Facility Lenders and the Debtors will not have adequate
liquidity to remain in business. The failure of the Debtors to comply with these
financial covenants in the future or to maintain adequate liquidity to remain in
business will provide for additional defaults under the DIP Facility which will
provide the DIP Facility Lenders with an option to foreclose on their
collateral, including the Debtors' Rigs, which are essential to the continuation
of the Debtors' businesses.
28. This is truly "stop-gap" relief that will only partially address the
Debtors' immediate cash crisis. The proposed modifications, while substantial,
are significantly less than the total labor cost reductions that the Debtors
will need to survive in the long term. Moreover, any delay in implementing the
interim wage reductions would require interim reductions of even such greater
magnitude in a shorter period of time that it would not be feasible. While the
interim modifications are in effect, certain of the Debtors will continue to
vigorously negotiate an agreement with the United States Teamsters to obtain
permanent labor agreement modifications that will enable the Debtors to
reorganize successfully and prior to the industry's seasonal downturn in July
when the Debtors' liquidity is expected to be at its lowest level.
29. The modifications the Debtors are proposing are in line with the
relief sought in previous cases where Section 1113(e) relief was granted. See,
e.g., In re US Airways, Inc., No. 04-13819 (Bankr. E.D. Va. 2004) (Order
Authorizing Interim Relief Pursuant to Section 1113(e) of the Bankruptcy Code)
(approving 21% reduction in salaries, modification to employer pension
contributions, and suspension of other provisions in CBAs); In re Russell
Transfer, Inc., supra 48 B.R. at 244 (approving 20% reduction in salaries and
benefits of Union employees and 10% reduction in salaries of administrative
employees); Hoffman Bros. Packing Co., 173 B.R. at 183 (affirming interim
reduction of debtor's health and pension contribution costs by more than
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two thirds); Nat'l Forge Co. v. Indep. Union of Nat'l Forge Emples. (In re Nat'l
Forge Co.), 289 B.R. 803 (Bankr. W.D. Pa. 2003) (noting approval of a 6% wage
rollback, cancellation of scheduled 5% wage increase and reduction in health and
welfare benefits); United Press Int'l, 134 B.R. at 515 (reducing wages to 80%
level and suspending severance pay); In re Evans Products Co., 55 B.R. 231
(Bankr. S. D. Fla. 1985).
30. Moreover, the Debtors are requesting only that which is necessary to
allow for their survival, in order to allow them the time and resources
necessary to continue their efforts to implement a long-term survival plan. See
United Food & Commercial Workers Union v. Almac's Inc., 90 F.3d 1, 6 (1st Cir.
1996).
31. The Debtors recognize the hardships that the interim modifications
will impose on all of their employees. These employees and their efforts are
critical to the ultimate success of the Debtors. But the short-term hardships
imposed by these wage reductions will pale in comparison to the hardship that
will be caused their employees if the Debtors cannot obtain the relief necessary
to continue their business operations.
32. Without immediate interim relief, the Debtors have a substantial
likelihood that they may face liquidation by mid 2006. The consequences of such
a fate would include the loss of jobs for both bargaining and non-bargaining
employees and essentially no recovery for unsecured creditors.
33. In contrast, if the Debtors are given the opportunity to implement the
suggested interim modifications to the CBA, the prospects for a better outcome
for all concerned are greatly enhanced. The Debtors believe that by gaining
additional liquidity through $5 million of additional borrowings and through
liquidity which may be obtained through the execution of the
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Debtors' business plan (which includes the relief requested herein beginning May
1, 2006), the Debtors will be able to cover the liquidity shortfall projected in
May and July 2006. The relief sought herein is a necessary step toward a
successful reorganization.
NOTICE
34. Notice of this Motion has been provided to those entities on the
Master Service List (as such term is defined in the Order Establishing Notice
Procedures entered on August 2, 2005 in these jointly administered cases) and
upon the United States Teamsters by U.S. Mail. In light of the nature of relief
requested, the Debtors submit that no further notice is necessary.
CONCLUSION
WHEREFORE the Debtors respectfully request entry of an order granting the
relief requested herein and granting the Debtors such other and further relief
as may be just.
This 13th day of April 2006.
/s/ Jeffrey W. Kelley
-------------------------------------------------
Ezra H. Cohen (GA State Bar No. 173800)
Jeffrey W. Kelley (GA State Bar No. 412296)
Harris B. Winsberg (GA State Bar No. 770892)
Troutman Sanders LLP
Bank of America Plaza
600 Peachtree Street, N.E. - Suite 5200
Atlanta, Georgia 30308-2216
Telephone No.: (404) 885-3000
Facsimile No.: (404) 885-3900
ATTORNEYS FOR THE DEBTORS
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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
NEWNAN DIVISION
IN RE: CHAPTER 11
ALLIED HOLDINGS, INC., ET AL. CASE NOS. 05-12515 THROUGH 05-12526
AND 05-12528 THROUGH 05-12537
DEBTORS. (JOINTLY ADMINISTERED)
JUDGE DRAKE
ORDER GRANTING DEBTORS' EMERGENCY MOTION FOR INTERIM RELIEF
FROM THE COLLECTIVE BARGAINING AGREEMENT
This matter is before the Court on the motion of Allied Holdings, Inc.(1)
as debtors and debtors-in-possession (collectively, the "Debtors") for an order
granting interim relief related to a collective bargaining agreement ("CBA")
pursuant to Section 1113(e) of the Bankruptcy Code (the "Motion").
The Court has considered the Motion and the matters reflected in the
record of the hearing held on the Motion. It appears that the Court has
jurisdiction over this proceeding; that this is a core proceeding; that notice
of this Motion has been provided to those entities on the Master Service List
(as such term is defined in the Order Establishing Notice Procedures entered on
August 2, 2005 in these jointly administered cases) and to the United States
Teamsters by U.S. Mail; that no further notice is necessary; that the relief
sought in the Motion is essential, at the present time, to the continuation of
the Debtors' business and to avoid irreparable damage to
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(1) In addition to Allied Holdings, Inc., the following entities are debtors in
these related cases: Allied Automotive Group, Inc., Allied Systems, Ltd. (L.P.),
Allied Systems (Canada) Company, QAT, Inc., RMX LLC, Transport Support LLC, F.J.
Boutell Driveaway LLC, Allied Freight Broker LLC, GACS Incorporated, Commercial
Carriers, Inc., Axis Group, Inc., Axis Netherlands, LLC, Axis Areta, LLC,
Logistic Technology, LLC, Logistic Systems, LLC, CT Services, Inc., Cordin
Transport LLC, Terminal Services LLC, Axis Canada Company, Ace Operations, LLC,
and AH Industries Inc.
the Debtors' estates; that the relief requested is in the best interests of the
Debtors, their estates and their creditors; and good and sufficient cause exists
for such relief.
Accordingly, it is hereby ORDERED as follows:
1. The Motion is GRANTED. All capitalized terms not otherwise defined have
the meanings ascribed to them in the Motion.
2. Pursuant to 11 U.S.C. Section 1113(e), effective as of the date of this
Order, the Debtors are authorized to reduce the compensation for all of the
United States Teamsters by 10%. Such modification will remain in effect until
rejection of the CBA pursuant to Section 1113(c) or an agreement in lieu
thereof, or until further order of this Court.
3. Nothing in this Order shall constitute post-petition assumption or
rejection, pursuant to 11 U.S.C. Sections 365 or 1113, of the CBA, and all of
the Debtors' rights with respect to the CBA are preserved, including the
Debtors' right to seek to further modify, assume or reject the CBA.
4. The Court shall retain jurisdiction to hear and determine all matters
arising from the implementation of this Order.
5. Notwithstanding the possible applicability of Bankruptcy Rules 7062,
9014 or otherwise, this Order shall take effect immediately upon entry.
6. Counsel for the Debtors is directed to cause a copy of this Order to be
served upon all parties on the Master Service List (as such term is defined in
the Order Establishing Notice Procedures entered on August 2, 2005 in these
jointly administered cases) and upon the
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United States Teamsters by U.S. Mail within three (3) days of entry of this
Order and to file a certificate of service with the Clerk of the Court.
SO ORDERED this ________ day of ____________________ 2006.
________________________________
W. Homer Drake
UNITED STATES BANKRUPTCY JUDGE
Prepared and presented by:
/s/ Jeffrey W. Kelley
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Ezra H. Cohen (GA State Bar No. 173800)
Jeffrey W. Kelley ( GA State Bar No. 412296)
Harris B. Winsberg (GA State Bar No. 770892)
TROUTMAN SANDERS LLP
600 Peachtree Street, N.E. - Suite 5200
Atlanta, Georgia 30308-2216
Telephone No.: (404) 885-3000
Facsimile No.: (404) 885-3900
Attorneys for the Debtors
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