Turmoil at Arnold Transportation: Layoffs and Financial Struggles After Acquisition

Turmoil at Arnold Transportation: Layoffs and Financial Struggles After Acquisition

Following its acquisition by Pride Group in 2022, Arnold Transportation faces significant layoffs, financial distress, and potential liquidation amid ongoing bankruptcy proceedings.

In 2022, Pride Group acquired Arnold Transportation, but recently, the company has terminated all its employees. According to a report filed with the Texas Workforce Commission on April 30, a total of 157 staff members were affected. Currently, Arnold has 402 power units and employed 341 drivers, as reported by the FMCSA.

The business challenges for Arnold Transportation Group deepened after Pride Group, its parent company, sought bankruptcy protection in late March. Arnold operated out of a facility leased from another Pride entity and has struggled financially since its acquisition. Moreover, Arnold’s truck fleet was leased from another business within the Pride Group, and the company relied on internal loans and factoring arrangements for financing. When Triumph Factoring Services discontinued their factoring agreement, Arnold’s primary financial lifeline became internal advances or Debtor-in-Possession (DIP) financing. In April, Pride Group managed to secure a $30 million DIP facility to maintain operations.

DIP financing is designed to support companies under creditor protection, prioritizing the lender’s claim on the debtor’s assets. Court records reveal that to qualify for borrowing under the DIP terms, Arnold was required to submit ‘know your client’ details, which it failed to provide timely, jeopardizing its ability to meet financial obligations. However, the company did manage to secure $800,000 in internal loans from Pride Truck Sales, which helped cover fuel expenses and payrolls.

Efforts to sell the assets of Arnold Group have been initiated. A report from the bankruptcy monitor dated April 24 mentioned, “If a sale does not happen soon, Arnold Group will be forced to shut down and liquidate.” The report also noted that bankruptcy could be imminent if the assets cannot be sold quickly.

Meanwhile, in Ontario, Pride Group is actively trying to offload its real estate portfolio, with all properties expected to be on the market by May 1. Agreements to sell locations in Bolingbrook, Illinois, Chehalis, Washington, and Cornwall, Ontario, are underway, with closures anticipated within the month.

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