By KEVIN NEVERS

Approximately 250 former employees of Priority Trucking—which began business as KAT Inc. and opened its Chesterton headquarters in 1983—are looking for jobs, after the majority stockholder in the holding company which acquired KAT in 1999 opted to liquidate its assets.

Priority Trucking officially went out of business at midnight Saturday, fleet supervisor Russ Steen told the Chesterton Tribune today. “It came out of the blue,” he said. “Until last Tuesday we had no indication.”

But on Aug. 26, Steen said, GE Capital Corporation of Stamford, Conn., announced that it was liquidating the assets of Transit Group, an Atlanta, Ga.-based holding company and the owner of numerous trucking firms across the country.

In late 2001 Transit Group filed for Chapter 11 bankruptcy protection and quickly received a $7 million debtor-in-possession financing facility from GEP Capital, as it happens the same firm which provided the bankrupt Bethlehem Steel Corporation with a $450 million in debtor-in-possession financing.

Then, about a year later, Transit Group emerged from Chapter 11, after GE Capital agreed to take a 70-percent stake in the company in exchange for money which Transit Group owed it. At the time GE Capital had also agreed to provide ongoing financial support for Transit Group, including $7 million for a new insurance program and $15 million for working capital and administrative claims.

But that was then and this is now. “We no longer exist,” Steen said.

Steen noted that Priority Trucking had employed a total of around 800, including truckers and in-house personnel, at its Chesterton and Farmington, N.Y., locations.

For a period of several years, beginning in 1997, Transit Group went on a buying spree, acquiring at least 19 truckload carriers, KAT being its thirteenth. But Transit Group was simultaneously acquiring debt and many of its new acquisitions—unlike KAT—had only been in business a short time. In 2000, for example, Transit Group posted consolidated revenues of $504.6 million but a net loss of $182.2 million, including a $144.1 million write-off of goodwill from its acquisitions.

Posted 9/2/2008