Gainey Corp. responds to Wachovia lawsuit

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Gainey Corp. on Tuesday, Sept. 30, issued a statement in regards to a $238 million lawsuit filed Friday, Sept. 26, by Wachovia Bank.

“As a matter of company policy, we do not typically comment on the specifics of ongoing litigation,” said Harvey Gainey, chief executive officer of the Grand Rapids, Mich.-based company. “However, the current financial crisis and its impact on lenders, notably including Wachovia Bank, are compelling some lenders to make hasty and ill-advised decisions.”

Wachovia’s lawsuit, which concerns loans made to Gainey Corp., also names Gainey Transportation Services, Super Service, Freight Brokers of America, Aero Bulk Carrier and Gainey Insurance Services as defendants. The lawsuit alleges that Gainey Corp.:

  • Fired Alvarez & Marshall North America, a restructuring company retained by Wachovia, after being notified of $7.6 million in defaults on principal and interest payments;
  • Continues to pay part of Harvey Gainey’s $1.3 million salary;
  • Continues to pay $186,850 per month in rent to Gainey Realty, which is owned by Harvey Gainey;
  • Continues to pay $115,000 per month to lease an aircraft from Gainey Aircraft, which is owned by Harvey Gainey; and
  • Continues to provide Harvey Gainey with a 2007 Mercedes sedan for his use.
  • “Gainey Corporation has sound business fundamentals, which include positive cash flow and operating income, and continued solid performance in the face of inflated fuel prices and general economic conditions,” Gainey said. “The company views the lawsuit as an attempt to undermine our ongoing negotiations.”

    Gainey Transportation Services — ranked No. 61 in CCJ‘s annual Top 250 ranking of for-hire trucking companies — owns 2,132 tractors and 4,800 trailers, and employs 1,585 company drivers. “Our 2,300 dedicated employees remain focused on providing a superior level of transportation service to all our customers — who include a majority of the Fortune 500 and most of America’s leading retailers, consumer brands and manufacturers,” Gainey said.