Port Elizabeth Terminal & Warehouse Corp. - Case Summary

Business Description

Established in 1924, the Debtors operate as a multifaceted third-party logistics (3PL) organization providing a range of transportation, logistics, and warehousing services.

• The Debtors’ service offerings include rail boxcar and container handling, warehousing, and multiple shipping options covering rail, truck, air, and international transport.
• The Company also provides specialized material handling, cross-docking, packing services, product care, and expertise in handling alcoholic beverages.

---

Operations Overview

The debtor entities include Judge Organization, LLC; P. Judge & Sons Trucking, LLC; Judge Warehousing, LLC; Port Elizabeth Terminal & Warehouse Corp.; Amex Shipping Agent, Inc.; and P. Judge & Sons, Inc.

Operating Locations

• The Judge Organization, LLC is based in Port Wentworth, GA.
• Debtors Amex Shipping Agent, Inc., P. Judge & Sons, Inc., and Port Elizabeth Terminal & Warehouse Corp. are based in East Rutherford, NJ.

---

Prepetition Obligations

As of the Petition Date, the Debtors report total secured and unsecured debt of approximately $13.2 million. The Company’s prepetition capital structure is summarized below:

Secured Debt

• The Debtors have approximately $2.7 million in secured debt obligations, consisting of factoring/merchant cash advances, a secured loan, and equipment lease debt.

Unsecured Debt

• The Debtors report approximately $10.5 million in aggregate unsecured debt, which includes:
  • Former Landlords and Vendors: ~$6.2 million
  • Current Landlords: ~$2.3 million
  • Major and Critical Vendors: ~$1.2 million
  • Payroll and Benefits Vendors: ~$446,000
  • Miscellaneous Debts: ~$269,000

---

Events Leading to Bankruptcy

The Debtors attribute their bankruptcy filing to several external financial pressures that significantly strained their businesses. The Company states that despite these challenges, its core operations remain sufficiently profitable to meet ordinary course obligations.

• Escalating Lease Costs: A substantial increase in demand for warehouse space led to a significant escalation in lease prices, which heavily drained the Debtors' finances.
• Increased Real Estate Taxes: The Debtors’ businesses were also impacted by significant increases in real estate taxes. As an example, a re-taxation of buildings by the City of Elizabeth, NJ, resulted in a $960,000 annual rent increase passed through from a landlord.
• Rising Insurance Costs: The Debtors faced burdensome increases in health insurance costs for both their company and union plans.

The immediate catalyst for the filing was a judgment obtained by one of the Debtors' landlords, which permitted the landlord to lock the Debtors out of their warehouse in East Rutherford, NJ. Facing this imminent threat, which could substantially impair ongoing business, the Debtors determined that a Chapter 11 filing was necessary to save and restructure their businesses.

On the Petition Date, the Debtors filed voluntary petitions for relief under Chapter 11 with the stated goal of restructuring their debt and reorganizing. Concurrently, the Debtors filed a series of first day motions to ensure a smooth transition into bankruptcy and stabilize operations.