GE Suit Not Expected to Snuff Cannon?s Fuse
by July 7, 2003 12:00 am 89 views
Springdale’s Cannon Express Inc. was sued on June 11 in the District Court of Dallas County, Texas, by GE Capital Corp., a division of the publicly traded conglomerate General Electric Co. of Fairfield, Conn.
The suit seeks to collect $6 million in debt related to trucking equipment, but Cannon officials have stated publicly that negotiations to resolve the dispute should prevent any interruption in service.
A filing by Cannon on June 24 with the Securities and Exchange Commission said a court had granted a temporary restraining order on June 19 that enjoined its use of the equipment. It said that Cannon should be allowed to complete deliveries that were then in progress.
A number of vehicles in Cannon’s 561-truck fleet will be returned to GE Capital to satisfy the debt.
On May 27, Arizona Diversified Equity LLP of Phoenix, Ariz., bought control of the carrier from Dean and Rose Marie Cannon.
Details of the private transaction were not available. The Cannons owned 60 percent of the company with 1.93 million shares, or about $1.35 million worth, after the May 28 close at 70 cents per share. Arizona Diversified likely paid more to obtain control of the company.
Also, according to SEC documents, CitiCapital Commercial Leasing Corp., which does business as Associates Leasing Inc., has filed a notice of default based on the change of ownership and failure to timely make required payments.
Cannon Express officials said they are in the process of negotiating the matter with CitiCapital. They also plan to expand their sales force and acquire other transportation companies to stabilize and expand the business.