Road freight merger creates “European industry champion”

BY Fraser Tennant

In a market valued at €400bn, Europe's two largest digital freight forwarders – road transport digitalisation specialist sennder and freight tech company Everoad – are to merge in a deal aimed at building the largest digital road freight platform on the continent.

Once the merger is complete, the new company – to be known as ‘Everoad by sennder’ – will have offices across six countries and lead the way in digital logistics and transportation completing over 35,000 loads per month. Its stated aim is to achieve revenues of €1bn by 2024.

To reach this target, the two freight logistics specialists will pool their technology and knowhow to optimise all the stages of the supply chain. Their digital solution – aimed at both carriers and shippers – reduces inefficiencies in the shipping process, meaning both reduced costs for shippers and increased revenue for carriers.

“With Everoad, we share a vision, DNA and common goals,” said David Nothacker, chief executive and co-founder of sennder. “In the midst of this international crisis caused by COVID-19, road freight has demonstrated its inimitable, strategic role in transporting essential goods. It now makes more sense than ever to join forces and integrate Everoad into the sennder group. In that way, we can jointly invest resources and knowhow to tackle the new challenges and opportunities emerging out of the crisis.”

Since 2015, Berlin-based sennder has strived to revolutionise the world of freight transport in Europe. By merging with its French counterpart Everoad they will further expand their geographic growth journey with local presences across all major logistics and transport hubs.

“Our objective was the same as sennder’s: to create a European industry champion within the freight forwarding and logistics industry,” said Maxime Legardez, chief executive and founder of Everoad. “By merging , we achieved this target and can also contribute to reducing the environmental impact of the industry.” Indeed, the new company sees itself as having a strategic role in reducing carbon emissions in the sector, which currently account for 6 percent of the European Union’s total CO2 emissions.

Mr Legardez concluded: “By becoming Everoad by sennder, we will share our expertise and experience acquired over more than four years of a pan-European vision.”

News: German freight tech start-up Sennder merges with France's Everoad

Commercial bankruptcy filings surge

BY Richard Summerfield

Commercial bankruptcy filings in the US increased by 48 percent in May from earlier in the year, according to the American Bankruptcy Institute (ABI).

Chapter 11 filings rose 28 percent in May from April, the ABI said, citing data from Epiq Systems. May saw a number of notable filings, including major retail chains such as J.C. Penney and Neiman Marcus.

“Companies that tried to shore up their balance sheets at the beginning of the year represent the initial wave of Chapter 11s due to the economic crisis brought about by the COVID-19 pandemic,” said Amy Quackenboss, executive director of the ABI. “The CARES Act and other swift government measures have been successful in keeping consumers afloat during the crisis. As this relief runs its course, however, mounting financial challenges may result in more households and companies seeking the shelter of bankruptcy.”

May’s commercial Chapter 11 filings represented a 29 percent increase from the 562 filings in April 2020. Total commercial filings were up 12 percent over the April 2020 commercial filing total of 2293. Total bankruptcy filings in May represented a 4 percent increase over the 38,444 total filings recorded the previous month. Total non-commercial filings for May represented a 3 percent increase from the April 2020 non-commercial filing total of 36,151.

The average nationwide per capita bankruptcy filing rate in May was 1.98 (total filings per 1000 per population), a decrease from the 2.09 filing rate during the first four months of the year. Average total filings per day in May 2020 were 1998, a 36 percent decrease from the 3130 total daily filings in May 2019.

There were 39,969 total bankruptcy filings in May, down 42 percent from the 68,860 total filings in May 2019. Total consumer filings decreased 43 percent in May, as the 37,391 filings fell from the 65,302 consumer filings registered in May 2019.

News: May Commercial Chapter 11s Increase 48 Percent over Last Year, Total Filings Down 42 Percent

DOJ releases revised compliance guidance

BY Richard Summerfield

This week the US Department of Justice (DOJ) issued a series of revisions to its ‘Evaluation of Corporate Compliance Programs’ which clarifies the new factors prosecutors may consider in the areas of risk management, policies and procedures, training and communications, mergers and acquisitions, and more in their evaluation of corporate compliance programmes.

Since the department first released guidance on how it evaluates corporate compliance programmes in 2017, there have been several revisions. Though the latest version leaves much of the substance of earlier versions unchanged, the most recent updates are in keeping with the agency’s efforts to improve its policies and provide transparency.

“The revised guidance on the Evaluation of Corporate Compliance Programs reflects additions based on our own experience and important feedback from the business and compliance communities,” said Brian Benczkowski, assistant attorney general of the DOJ’s Criminal Division, in a statement. “Although much of the substance of the prior version remains unchanged, the updates we have made are in keeping with our continued efforts as prosecutors to improve our own policies and practices to ensure transparency and the effective and consistent enforcement of our laws”.

One of the most telling changes has been in the section of the guidance concerning compliance programme structure, in which new language has been added to reflect how the Criminal Division assesses a company’s risk profile and offers solutions to reduce its risks. The new language states prosecutors will make a “reasonable, individualised determination in each case that considers various factors including, but not limited to, the company’s size, industry, geographic footprint, regulatory landscape, and other factors, both internal and external to the company’s operations, that might impact its compliance program”.

There have also been notable revisions to the language requiring prosecutors to ask companies whether their compliance programme is “adequately resourced and empowered to function” effectively. In previous versions of the guidance, prosecutors were encouraged to ask if the compliance programme has been “implemented effectively”.

Furthermore, the revisions note that prosecutors will evaluate compliance programmes at the time a potential offence occurred and when a decision is made about bringing charges. This will enable them to track the steps taken by companies to prevent problems from reoccurring.

News: DOJ revises its Corporate Compliance Guidance

Shattered finances: glassmaker Libbey files for Chapter 11

BY Fraser Tennant    

In a bid to restructure its balance sheet following plunging demand for its products, glassware manufacturer Libbey and its US-based subsidiaries have filed for Chapter 11 bankruptcy.

Like many retailers, Libbey – which operates manufacturing plants in the US, Mexico, China, Portugal and the Netherlands – has been hit especially hard by the outbreak of the coronavirus (COVID-19) pandemic and its crippling impact on global economies. The Chapter 11 process is expected to strengthen Libbey’s balance sheet and help it to navigate the effects of COVID-19.

Moreover, a number of Libbey's existing lenders have agreed to provide up to $160m in debtor-in-possession (DIP) financing, including a $100m revolving credit facility and a $60m term loan. Following court approval, Libbey expects this financing, together with cash flow from operations, to support the business during the court-supervised process.

"While we entered 2020 with positive momentum from our strong finish in 2019, the dramatic and prolonged impact of COVID-19 on the demand for our products and on our business is truly unprecedented in Libbey's more than 200-year history,” said Mike Bauer, chief executive of Libbey. “As a result, entering this process is a necessary step to address our liquidity, strengthen our balance sheet and better position Libbey for the future.”

Libbey is continuing to serve customers and end users globally throughout the Chapter 11 process, and will continue to evaluate the operating environment and make adjustments, as necessary, to adapt to the impact of COVID-19.

“We believe this process will help Libbey become an even stronger, more influential partner to our customers, vendors and end users, and ensure we continue to create the most rewarding experiences with our extensive line of high-quality glassware and other tabletop products."

One of the largest glass tableware manufacturers in the world, Libbey supplies tabletop products to retail, foodservice and business-to-business customers in over 100 countries. Libbey's international subsidiaries in Canada, China, Mexico, the Netherlands and Portugal are not included in the Chapter 11 proceedings and are operating in the normal course of business.

Mr Bauer concluded: “As we navigate the current environment, we remain focused on providing end users with products that are environmentally sustainable, beautiful and durable.”

News: Libbey Commences Chapter 11 Reorganization with $160 Million in Agreed Financing

Texas Capital and Independent Bank abort $5.5bn merger

BY Fraser Tennant

Citing the volatile economic conditions caused by coronavirus (COVID-19), Texas Capital Bancshares and Independent Bank Group have mutually agreed to terminate their $5.5bn merger agreement.

The termination was approved by both companies’ boards of directors after careful consideration of the significant impact of COVID-19 on global markets and on the companies’ ability to fully realise the benefits they expected to achieve through the merger.

“Due to the unprecedented impact of the COVID-19 pandemic, both companies’ boards of directors believe it is in the best interests of our employees, clients and all of our shareholders to focus on managing our business during this time,” said Larry Helm, chairman of Texas Capital Bancshares. “With the talent and depth of our team and strong organic growth model, Texas Capital Bank has built a resilient business with lasting client relationships and a record of value creation through changing market dynamics and economic pressures.”

Neither party will pay any termination fee as a result of the mutual decision to terminate the merger agreement.

“While both companies believed in the benefits of the proposed transaction, it would not be prudent to continue to pursue the combination and integration of our companies at this time,” said David R. Brooks, group chairman and chief executive of Independent Bank Group. “I am confident this is the right decision for our company and our customers, employees, shareholders and other stakeholders. This decision allows us to dedicate our focus and resources toward ensuring the strength of our business, serving the interests of our customers and protecting the health and safety of our employees during these unprecedented times.”

Coinciding with the termination of the merger, Texas Capital Bank president and chief executive Keith Cargill announced that he had stepped down from both roles with immediate effect.

Mr Helm concluded: “Our dedicated team, whose tireless efforts to enhance our clients’ experience and the communities where we operate, will continue to guide Texas Capital Bank’s purpose and success.”

News: Texas banks call off merger, citing coronavirus impact