PEORIA, Ill. (WMBD) — The over-the-road bus company that puts Peoria’s name across the state has filed for bankruptcy.
According to records from the U.S. Bankruptcy Court in Peoria, Peoria Charter Coach Co. filed their Chapter 11 petition. The petition states the company has less than 50 creditors, and less than $10 million in both assets and liabilities.
The move is to keep the busses rolling, said company CEO James Wang.
“This fall, it became clear that filing for reorganization was our best option and in the best interest of our customers, employees, vendors, and the company’s long-term future,” he said.
The filing came on the heels of the company not being able to make the final balloon payment on a COVID-19 loan, said Wang, who started with the company in 2011 as a weekend driver and eventually purchased the company from its former owner last year.
The family-owned business, located in Peoria’s North Valley, received emergency funds under the Main Street Loan Program which was part of the CARES Act passed by Congress in response to COVID and the forced business closures throughout the country, Wang said in a statement.
That money, he said, allowed the company to avoid mass firings and continued to pay our employees.
“Unfortunately, the MSLP interest rate more than doubled over time, from 3.1% to 8.5%, and the final balloon payment became unmanageable before the December 11, 2025, deadline,” Wang said. “We are not alone; there are many small businesses across the country which are facing this same COVID hangover.”
The transit industry, he said, “has been recovering from the severe disruptions caused by COVID-19, with ridership and charter demand rebounding but still facing headwinds like rising fuel and labor costs, supply chain issues for parts, and lingering debt from federal relief loans like the MSLP.”
The petition is filed under the subchapter V of Chapter 11. Federal bankruptcies can be filed in many different ways. The type of petition the bus company filed is not to liquidate or close the company but to restructure the debt so the company can keep operating.
The subchapter V portion is for companies with less than $3.424 million in debt and it “streamlines” the process.
“Subchapter V imposes shorter deadlines for filing reorganization plans, allows for greater flexibility in negotiating restructuring plans with creditors, and does not require the payment of United States Trustee quarterly fees,” according to the U.S. Trustee‘s website.
According to the company’s attorney Jeanna Reinbold, “the company’s main obligations include a large lender which the company will seek to restructure and leases for motor coaches and equipment and other obligations which are being paid timely and will be maintained.”
Wang stressed that Peoria Charter is a “healthy company.”
“We are profitable. We have positive cash flow. Our day-to-day operations are strong. Peoria Charter transports on average 400,000 people over 3 million miles a year,” he said. “Our Chapter 11, Subchapter V restructuring has nothing to do with our current business performance.”
The filing last week is a “tool” to help the company reorganize and not shut down.
“Our employees, our services, and our standards of quality remain unaffected. We are still here. Still running buses. Still committed to safety, reliability, and the communities we serve,” he said.
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