Jim O’Neal dropped a bomb on us.
Just days after sharing his company’s financial slide during the time he served as Springfield mayor, O’Neal’s O&S Trucking Inc. filed for Chapter 11 bankruptcy reorganization.
Nowhere in the 30-minute sit-down interview with reporter Brian Brown did O’Neal indicate the company was on the brink of seeking bankruptcy protection. He was candid with Brown about the overall financial picture and pointed mostly to reasons outside his control – a weak economy slowing the shipment of goods, evolving and costly federal regulations, and driver-recruitment challenges. Of course, his commitment to obligations as mayor pulled him away from his paying job, and the bottom line was he was refocusing on building the book of business and repairing inefficiencies.
He didn’t say that book of business might include an affiliation with Prime Inc. – as is requested in the May 30 bankruptcy filing – or that becoming more efficient meant reorganizing under bankruptcy protection. During the interview, O’Neal laid out a revenue loss of $20 million, or a third of O&S Trucking’s sales since 2008.
Could our reporter have poked and prodded some more during the interview? I’m going to always say yes on that. I’m always pushing in that direction. Either way, the conversation didn’t get there.
When the news came through our newsroom, via a Web story posted to Ozarks First, editorial staff discussion moved quickly from a feeling of being used by a source with whom we had just completed a candid interview to a confidence that O’Neal knew the company was headed toward bankruptcy when we interviewed him – even as he was announcing his resignation at the close of a May 7 City Council meeting. Given the preparations required before filing for bankruptcy, he had to have known.
Brown interviewed O’Neal at O&S on May 18. According to the bankruptcy filing, the company called a special meeting May 17 for the board of directors, namely Jim and Deborah O’Neal and Gary Brown. The meeting was called “for the purpose of discussing the financial condition of the company and its prospective inability to pay its debts as they become due,” according to the meeting minutes in the court record.
I’m not saying O’Neal was obligated to tell Brown anything more than he did in the interview, and I’m not saying Brown asked all the right leading questions to arrive at a bankruptcy possibility. I’m just saying I’m perplexed that he wouldn’t bring it to light during the interview. He was one day removed from signing off on it. These are the scenarios that make journalists skeptics. If we ask an unexpected question, it’s because unexpected news happens, and we want to be full and complete in our reporting as it happens.
Now that it’s out, it seems aligning with Prime is O&S Trucking’s only hope. In the court records, O&S shows assets of fewer than $50,000 and liabilities between $10 million and $50 million. Its estimated creditors are between 200 and 999.
Apparently, O&S and Prime officials had been negotiating terms of a business relationship and the emergency motion to the courts says that, if approved, O&S would receive 80 percent of revenue it generates by transporting freight; use Prime’s buying power for fuel; and additional freight business from Prime’s customer base. Prime would handle the administrative, accounting and marketing functions of O&S.
Additionally, in the agreement, O’Neal is personally seeking commissions of 3 percent of revenue generated by O&S in the first year, 2 percent in the second year and 1 percent in the third.
“The business relationship and affiliation with Prime is a crucial, indeed indispensable, program for the maintenance and promotion of (O&S Trucking’s) business and the enhancement of its prospects for a successful reorganization,” the motion reads.
What trucking company wouldn’t want to align with Prime, which has consistently recorded revenues of $800 million in recent years?
In any case, O’Neal the trucking veteran has left newsrooms across the city hustling to keep pace with him. We’ll see what the next turn brings him and the company.
Springfield Business Journal Editor Eric Olson can be reached at eolson@sbj.net.
