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IdleAire files for bankruptcy
By Andy Duncan
An IdleAire module in use at the TravelCenters of America on I-81 in Troutville, Va., north of Roanoke.
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Claiming assets of $210 million and debts of $303 million, elec- trified- parking provider IdleAire Tech- nologies has filed for Chapter 11 bankruptcy in Delaware, where the Knoxville, Tenn., company is incorporated.
Among the claims against the company listed in the May 12 filing is an $18 million lawsuit filed on behalf of a Florida trucker who charges that an IdleAire installation pumped carbon monoxide into her cab, killing her husband and poisoning her.
The bankruptcy filing isn’t unexpected. IdleAire told the U.S. Securities and Exchange Commission in mid-April that as of Dec. 31, 2007, the company had cash on hand “to sustain approximately four months of operations,” meaning only through the end of April 2008. IdleAire said at the time it had lost $93.4 million on revenue of $31.8 million in 2007, compared to a 2006 net loss of $60.2 million on revenue of $10.9 million.
Chapter 11 bankruptcy, named for the pertinent section of the U.S. Bankruptcy Code, enables a company to reorganize its finances free of the threat of creditors’ lawsuits, though a majority of the creditors must OK the eventual reorganization plan.
“We have filed Chapter 11 for reorganization, and not Chapter 7 for liquidation,” company spokesman John Doty told eTrucker May 15. “Our sites are open and serving our customers, and we expect our sites to remain open and serving our customers.”
May 15 calls to fuel desks at truck stops with IdleAire installations indeed suggested that everything in the lots was business as usual.
The Knoxville News-Sentinel reported that the corporate name "IdleAire Acquisition LLC" was reserved with the Delaware secretary of state's office the same day as IdleAire’s bankruptcy filing. Doty said he had no information on IdleAire Acquisition LLC, its owners and its plans for the company.
The lawsuit filed April 30 in Knox County, Tenn., circuit court by Miami attorney Don Russo on behalf of Nancy Younger of Polk County, Fla., and the estate of her late husband, William Younger, charges that while the Youngers were sleeping in their cab at a Knoxville, Tenn., truck stop “on or about” July 12, 2007, and while hooked up to an IdleAire module, “they were overcome by carbon monoxide gases that were sucked in through the Defendant’s HVAC system into the cab of their truck from the diesel emissions of nearby idling trucks parked in their vicinity.”
As a result, the court document continues, “the Youngers sustained severe and permanent injuries, including permanent brain damage.” William Younger since has died from his injuries, the document charges, while his widow “is permanently and totally disabled and unable to work. She has required, and will continue to require, medical treatment and attendant care.” All this is “a result of the defective design and malfunctioning of Defendant’s product,” the document charges.
Asked about the suit, Doty said, “We’re not going to comment on active litigation.”
The lawsuit does not specify at which Knoxville truck stop the alleged incident took place. According to IdleAire’s website, three Knoxville truck stops – one Petro and two TAs – have IdleAire installations.
Founded in 2000, IdleAire has used government grants to rapidly build by far the nation’s largest electrified-parking network, going from 24 sites at the end of 2005 to 130 sites at the end of 2007. Three-fourths of the sites are in the TravelCenters of America chain, which since May 2007 includes all Petro locations, but the company reported in April it had halted virtually all construction. The typical IdleAire site costs $1 million for 65 electrified parking spaces, or $15,000 per space, the company says.
Besides electrical power, IdleAire hookups provide such services as heating and cooling, Internet connection, satellite television, long-distance phone calls and pay-per-view movies.
According to paperwork filed with the U.S. Bankruptcy Court, the largest single claim against IdleAire is not the Younger lawsuit but $23 million claimed by infrastructure giant PB Constructors of New York City in a breach-of-contract suit against the company.
The biggest undisputed claim on IdleAire’s list of its 20 biggest creditors is $294,000 owed to BlueCross BlueShield of Tennessee. IdleAire also owes a collective $205,000 to AT&T and Verizon, $100,000 to marketing firm Communications Development of Maumelle, Ark., $53,000 to Knoxville electrical contractor BESCO, $51,000 to print shop Dimension Graphics of Lenexa, Kan., $36,000 to United Parcel Service and $46,000 in rent to Grace Commercial Properties of Johnson City, Tenn., among other undisputed obligations.
IdleAire has been in talks with investment bank KPMG Corporate Finance and crisis-management firm Getzler Henrich & Associates in hopes of securing near-term funding. IdleAire lists claims by both companies, $717,000 total, among the disputed claims on its Chapter 11 filing.
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