Red River Waste Solutions, the city’s trash hauler, has filed for Chapter 11 bankruptcy on $31.1 million in debt.
Red River has been Fort Wayne’s trash hauler since 2018, and residents and elected officials have criticized the company for missed trash pickups and poor service numerous times. In 2017, Red River had the lowest bid for trash service at $4.9 million, which was almost $1.5 million less than the city’s contractor at the time, Republic Services.
Chapter 11 bankruptcy is known as the “reorganizational” form of bankruptcy because it involves the company reorganizing its affairs, debts and assets as it retains control over operations. Unlike if it had filed Chapter 7 bankruptcy, Red River won't have to liquidate its assets.
Red River Waste Solutions LP filed for bankruptcy Thursday in the U.S. Bankruptcy Court for the Northern District of Texas. The company is based in Dripping Springs, Texas, but also has locations in Fort Wayne; Del Rio, Texas; Fort Knox and Hardin County, Kentucky; Huntsville, Alabama; and Nashville and Union City, Tennessee.
Fort Wayne City Council lists a presentation from the Solid Waste District and Red River on the agenda for its 5:30 p.m. meeting Tuesday.
As of Oct. 11, Red River has $31.1 million in total debt funded obligations, according to a declaration filed by James Calandra, managing director of CRS Capstone Partners LLC and the proposed chief restructuring officer for Red River.
“Absent the filing of this Chapter 11 case and the forthcoming restructuring and/or sale, it appears that the debtor’s business will continue to deteriorate,” the declaration stated.
The declaration also set up Weldon Smith as an immediate lender for debtor in possession financing. Smith, whose 2012 trust is listed as having about 11% ownership interest in the company, will lend Red River $500,000 in a new line of credit, which will aid the company in meeting its short-term operational needs, according to court documents.
No hearing had been set as of Friday.