PEORIA, Ill. – A Peoria bus company has filed for bankruptcy protections.
In a statement, Peoria Charter CEO and co-owner James Wang says the company filed for Chapter 11, Subchapter V, bankruptcy protection.
Wang says the filing is due to Peoria Charter being unable to make a final balloon payment on a COVID-19 loan. He cites 48 creditors mentioned in the court filing, and paid bills on time, with the balloon payment as the one exception
Wang says the company filed for emergency funds in December 2020 under the Main Street Loans Program, which was part of the CARES Act Congress passed, to avoid mass firings and continue paying their employees.
But Wang says the interest rate doubled over time and the final balloon payment became unmanageable. He says the rate went from 3.1% to 8.5%, with the payment not possible before a December 11th, 2025 deadline. Wang adds that the statute of the MSLP does not allow for negotiations of a payment plan.
Wang notes that the bus industry is still recovering from the effects of COVID, with ridership and charter demand decreasing and increasing costs in fuel and labor, along with supply chain issues for parts and lingering debt.
However, Wang says the company is in a position of growth, due to strong regional demand. He cites the past Thanksgiving weekend where Peoria Charter transported about 8,000 University of Illinois Champaign-Urbana students to the Chicago suburbs and back through snow storms. Wang also says the company is averaging about 400,000 passengers each year.
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