Spokane Journal of Business

WTB’s problems intensify

Big trucker, leasing affiliate both file Chapter 11; layoffs idled 42 workers last week

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WTB Inc., a troubled Spokane trucking company that at one time purportedly commanded a fleet of 260 trucks operating nationwide, has filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code.

Petitions submitted to the U.S. Bankruptcy Court here by WTB and Inland Northwest Leasing Inc., a WTB affiliate that also filed for protection, didnt list the companies total debts. However, documents submitted by some of the companies major creditors suggest that the figure could be in the millions of dollars.

In what appeared to be a possible major blow to Garry Padrta, who heads both companies, Judge John M. Klobucher last week ruled that WTB couldnt use cash proceeds derived from a large number of trucks and trailers that the company has been leasing, and then subleasing, and on which it now is delinquent.

Padrta had argued in Bankruptcy Court documents that without the use of the accounts receivable, WTB would be effectively shut down with irreparable harm to (the company), its employees, and its substantial creditors.

When reached by telephone last week, however, he said the company is still operating, has a couple of good prospects on financing, and is receiving strong support from its drivers and customers.

WTB will continue, but at a down-sized scale, he says.

Padrta says he was forced to lay off 42 employees earlier last week, and will operate WTB henceforth with an office staff of six to eight people and a contract fleet of about 65 trucks. Also, he says the company is moving its administrative offices out of a building it constructed in Post Falls just a couple of years ago and into a building at 24 N. Sycamore in Spokane. That building houses a related business that Padrta owns, called WTB Reload Inc., which loads lumber from trucks onto rail cars. He says he plans to put the Post Falls building up for sale.

WTB, a 23-year-old company that once was known as Western Truck Brokers Inc., contracts with independent flatbed truck owner-operators to haul its customers cargo across 48 states and throughout much of Canada. As a broker, the company arranges shipments of machinery, building materials, steel, aluminum, and other general commodities.

The company ranked ninth in size, based on its then 42 reported employees here, in a list of Spokanes largest trucking companies published in the Journal of Business last November. The company reported that it logged 21 million miles, hauled 336,000 tons of freight, and had $25 million in gross revenue in 1995.

Inland Northwest Leasing, which Padrta says probably will cease operations, leased trucks to owner-operators.

WTBs internal problems began to bubble to the surface last fall when Padrta, the companys president and founder, and Rob Wolf, its former vice president and general manager, filed lawsuits against each other.

WTB accused Wolf of a wide range of acts that allegedly harmed WTB financially. Those purported acts included slandering the company, making improper loans, hiring employees with poor driving records, inflating his own compensation based on faulty financial figures, and even seizing a truck in an illegal repossession and refusing to return it.

Wolf, who was fired in August of last year, denied Padrtas accusations. In his own suit, he accused Padrta of breach of contract, fraud, misappropriation, and other wrongdoing. He claimed that Padrta misused WTB funds, credit, and employees for his own personal gain and to bolster other business ventures he owns. He said that Padrta had interfered with his management of WTB, unilaterally ordered numerous trucks and other equipment that the company couldnt afford, and drained its cash flow by forcing it to pay bills incurred by Inland Northwest Leasing and a construction business that he also owned. He further alleged that Padrta suffered from a manic-depressive, or bipolar, disorder that rendered him incapable of managing WTB.

Those lawsuits havent been resolved.

WTB is owned partly by employees through an employee stock ownership plan created in 1989. Court documents say the company had a $2 million line of credit account through U.S. Bank that the bank rescinded last month and that the bank has made a $1.4 million claim against WTB. Another large creditor, Navistar Financial Corp., which loaned WTB money for the purchase of trucks and trailers, claimed in court documents that it, too, is owed about $1.4 million.

Kim Crompton
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