Mississauga, Ontario – Pride Group, one of Canada’s largest trucking carriers, has filed for bankruptcy protection following a lawsuit from lender Mitsubishi HC Capital America. The lawsuit seeks $100 million. Pride Group submitted the creditor protection filing on Thursday, invoking the Companies’ Creditors Arrangement Act (CCAA) in Canada. Under the CCAA, the company receives a stay of proceedings for at least 10 days.
In a news release, Pride Group stated that the CCAA proceedings and seeking recognition under Chapter 15 cases would enable them to continue operations, stabilize their business, establish governance controls and monitoring, and develop a restructuring plan for the benefit of stakeholders. The company believes this move is in the best interest of employees, customers, business partners, and other stakeholders.
The bankruptcy protection filing comes as a result of Mitsubishi HC Capital’s lawsuits accusing Pride Group’s president and CEO, Sulakhan “Sam” Johal, and vice-president, Jasvir Johal, of defaulting on personally guaranteed payments. Mitsubishi HC Capital is seeking $100 million in damages through these lawsuits.
Pride Group, based in Mississauga, Ontario, is a prominent North American truckload carrier with a fleet consisting of 391 tractors and 1,200 trailers. Their terminals are spread across Ontario, Quebec, Alberta, and Illinois. Additionally, the company acquired Texas-based truckload carrier Arnold Transportation Systems in 2022, significantly expanding their transportation assets to 805 trucks and 2,600 trailers in Canada and the United States.
Apart from Mitsubishi HC Capital’s lawsuits, more than 20 other lenders have filed claims against Pride Group. Cumulatively, these claims amount to $637 million. Some of the major lenders include Daimler Truck Financial Canada ($193 million), Daimler U.S. ($69.7 million), Paccar Financial ($46.9 million), and Volvo Financial Services Canada ($9.8 million). All of these lenders have lodged their claims with the U.S. Bankruptcy Court for the District of Delaware.
The Pride Group’s bankruptcy protection filing marks a challenging time for the company, as it faces significant legal and financial hurdles.