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September 12, 2005
To: LOCAL UNION NOS. 5, 20, 25, 41, 69, 79, 89, 106, 120,
135, 213, 222, 223, 251, 299, 312, 326, 327, 332, 362, 364, 385, 391, 395, 414,
449, 469, 490, 492, 509, 512, 528, 542, 557, 560, 568, 579, 592, 604, 612, 614,
631, 651, 667, 710, 745, 763, 769, 822, 848, 880, 891, 817, 927, 938, 957, 959,
961, 979 and 984
Re: Allied Holdings, Inc. et al. Case Nos. 05-12515 through 05-12537
Dear Brothers and Sisters:
This letter is our Second Report to you regarding the above cases.
Since our First Report to you last month, the United States Trustee appointed
the International Brotherhood of Teamsters to the Official Committee of
Unsecured Creditors in this matter. The committee has had several meetings and
conference calls, and we have participated in all of them.
There is no deadline yet for filing claims in this matter.
We have no indication that the debtor is seeking relief from any of your
collective bargaining agreements at this point in time. Should you receive any
demand for concessions, or any notification referring to "rejection" or
"modification" of the contracts, or "Section 1113" of the Bankruptcy Code, refer
them to this office immediately.
You should continue to process grievances per your normal procedure and grieve
violations of the collective bargaining agreement as they occur.
We have had no reports of problems with employee paychecks, union dues checks,
or the like. We understand that all regular payments of pension, health and
welfare contributions are being made in a timely manner.
There have been surprisingly few developments in the first 44 days of the case
(Allied filed its Chapter 11 petition on July 31, 2005). Allied has not yet
developed a business plan, or at least one that it has revealed publicly.
A committee of equity holders (stock holders or owners) has petitioned the court
for official recognition and appointment. This motion will be heard on October
11, 2005.
The office of the United States Trustee conducted an initial meeting of
creditors (or so-called "341" meeting, after the section of the Bankruptcy Code
enabling such meetings) on September 2, 2005. The IBT attended as did a small
number of other creditors. Because the company has not yet filed its schedules
of assets and liabilities, there was little substantive discussion of the
company's financial future or current picture. There was little new information
learned. Allied continues to maintain that its problems relate to declining auto
production, high fuel costs and interest payments, and the cost of the
collective bargaining agreement, as well as a few other matters. Allied expects
to emerge from bankruptcy in one year.
The following financial information about Allied is known from public sources:
The company has borrowed approximately $230 Million in a loan facility known as
the Debtor-in-possession or DIP facility. It is an eighteen month facility,
putting an outer limit on the bankruptcy of early 2007.
The company expects to file its 10Q over the next 30 days. It will file its
statement of financial affairs (the so-called "schedules" of assets and
liabilities) as well as its first monthly operating report in the next two to
three weeks.
Employees can find Allied management's view of this matter at
www.alliedholdings.com on the
reorganization tab.
The lack of developments in this matter indicates that management is preoccupied
with something of extreme importance to management. We will report further on
this matter when we learn what it is.
We will periodically notify you of events in this case as circumstances warrant.
Please do not hesitate to call our offices with any questions you may have about
the bankruptcy.
Very truly yours,
PREVIANT, GOLDBERG, UELMEN, GRATZ, MILLER & BRUEGGEMAN, s.c.
BY
Frederick Perillo
Jill M. Hartley
cc: Patrick Szymanski, Esq.
Neil Ditchek, Esq.
Jim Wallington, Esq.
Fred Zuckerman, TNATINC Director
L. Deaner
M. Conyngham
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