The Westport-based courier company Velocity Express Corp. filed for Chapter 11 bankruptcy protection from creditors, while simultaneously revealing a buyout deal with an affiliate of ComVest Group.
ComVest agreed to exchange debt owed it by Velocity Express in exchange for a controlling stake in the company. TH Lee Putnam Investors is Velocity Express”™ largest shareholder with 36 percent of its shares, while ComVest holds a 31 percent stake.
Earlier this year, Velocity Express CEO Vincent Wasik had disclosed an attempted management-led buyout of Velocity Express.
Velocity Express runs courier services in more than 30 states, largely using independent contractors as drivers. The company had been sued by some drivers who claimed they should have been classified as full-time employees, with accompanying access to health insurance and other benefits.
In its bankruptcy filing, Velocity Express lists St. Paul Fire & Marine Insurance as holding the largest unsecured loan at $1.8 million; in Connecticut, the accounting firm UHY L.L.P. has the largest debt outstanding at $200,000.
