CONSOLIDATED FREIGHTWAYS BANKRUPTCY
INFORMATIONAL REPORT No. 1
September 6, 2002
The Teamsters National Freight Industry Negotiating Committee is providing the following report to
members on the progress of the bankruptcy of Consolidated Freightways and related companies:
When did Consolidated go bankrupt? On September 3, 2002, Consolidated Freightways and
five related companies filed their bankruptcy petitions in the U.S. Bankruptcy Court for the Central
District of California. The other companies are Consolidated Freightways of Delaware, CFAir Freight
Corp., CFMovesU.Com, Inc., Redwood Systems, Inc. and Leland James Service Corp. The companies
filed in Riverside, CA, because of the proximity to the largest terminal, near Mira Loma.
The Canadian and Mexican subsidiaries are not in bankruptcy. Con-Way, CCX and other non-union
operations are not in bankruptcy. (No law requires a company to put all of its subsidiaries into
bankruptcy just because one or more go bankrupt, unless certain standards are met.) The union will
investigate whether there is a basis to compel the bankruptcy of related companies and whether other
legal action will be taken regarding the non-union operations.
For obvious reasons, the ongoing investigation of the affairs of Consolidated and its related companies
will be kept confidential by the union, to maintain legal privilege. Future reports will disclose
information of a non-confidential nature.
Will delinquent wages be paid? Yes. Consolidated obtained an order from the court allowing it
(but not ordering it) to pay the two previous payrolls in a sum of approximately $35 Million.
Consolidated has notified the United States Trustee (an office of the Department of Justice) that it
intends to pay the delinquent payroll for the last two weeks promptly and that no checks will bounce.
It is not true that the court has capped employee claims at $4650 as is rumored. There is no maximum
dollar limit on any claim. Employees receive a priority of $4650 for wa