Pride Group Holdings has initiated proceedings under the Companies’ Creditors Arrangement Act (CCAA). This decision follows a claim filed by Mitsubishi HC Capital America, seeking damages of approximately US$100 million.
The claim, lodged against Pride Group’s founders Sulakhan ‘Sam’ Johal and Jasvir Johal, alleges default on credit lines taken out to bolster inventories for Pride Truck Sales and Tpine Leasing, with the founders personally guaranteeing these loans. While these claims remain unproven in court, they signal significant financial strain within the organization.
Mitsubishi HC Capital Canada, the Canadian arm of the lender, declined to comment initially but later confirmed Pride Group’s decision to seek creditor protection. In response, Pride Group issued a press release, outlining its intent to utilize the CCAA proceedings to stabilize its operations, implement governance controls, and develop a restructuring plan aimed at benefiting stakeholders.
During these proceedings, which afford a 10-day stay of proceedings initially, Pride Group assures stakeholders of “business as usual” without disruptions to services.
“We do not anticipate any disruption to the products and services we provide,” the company said.
Ernst & Young Inc. was appointed as monitor in the CCAA proceedings.
In the 2023 Today’s Trucking list of the Top 100 fleets, Pride Group Logistics held the 20th position among Canadian for-hire trucking companies. The company managed a diverse fleet comprising 14 straight trucks, 724 tractors, and 2,411 trailers, alongside overseeing operations across 14 terminals.
Additionally, Pride Group was engaged in various enterprises including the sales of new and used trucks and tractors, truck leasing, financing, logistics, maintenance, and fuel sales. Founded by Sam and Jas Johal, the company initially started as a single-location used truck retailer. Over time, it has expanded its footprint to encompass more than 50 locations spanning the United States and Canada.
“After the pandemic, the North American trucking industry experienced a significant downturn that negatively impacted transportation asset values and increased delinquencies in the leasing business,” the company explained.
Information for this story was found via Truck News and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
