, the 73-year-old trucking company that has struggled with a credit crunch exacerbated by the Sept. 11 attacks, said it will liquidate through a chapter 11 bankruptcy, putting 15,000 employees out of work.
The company had been trying to restructure through negotiations with bank and real estate lenders but said the efforts were unsuccessful and it doesn't have the money to stay in business. Two subsidiaries, CF AirFreight and Canadian Freightways, will continue operating and their employees won't be laid off. Employees at the Vancouver-based carrier's other units were told not to report to work Tuesday.
"We expected that recent discussions with our banks, other lenders and real estate investors would enable us to obtain significant additional financial resources," the company said in letters to its employees. "Unfortunately, this has not been the case."
The effort to raise new money was crippled when CF's surety bondholders canceled coverage related to a self-insurance programs for worker's compensation and vehicular casualty.
"Ultimately, the company was unable to secure financing and to bridge the surety bond gap, at which point the situation became critical. Moreover, the company anticipated that a second insurer would also cancel coverage," it said. "Without the availability of further financing, the board reluctantly concluded that the company simply could not continue to operate, pay employees and meet its obligations."
The company's stock was hammered last month when it received a delisting notice from
after failing to file its second-quarter earnings report on time. The shares closed at 71 cents on Friday; they began August at $2.19.