Frequently Asked Questions
Click the questions below for their answers.
General Questions
- Q: What is Chapter 11?
- Q: Why did South Bay Expressway file to reorganize under Chapter 11 of the U.S. Bankruptcy Code?
- Q: Does this mean that South Bay Expressway is going out of business?
- Q: Does South Bay Expressway have enough cash to stay in business?
- Q: How long will the reorganization process take?
- Q: Which entities are included in the filing?
- Q: Is the toll road going to close?
- Q: Where can I find Chapter 11 case information?
Supplier Specific Questions
- Q: Will suppliers continue to be paid for goods and services they provide to Company?
- Q: I have unpaid invoices dated before the bankruptcy date (i.e., pre-petition invoices). What should I do?
- Q: Will I need a claim form, or will I automatically be paid for the outstanding, pre-petition amount owed to me?
- Q: Why can’t the Company pay me what I am owed?
- Q: Why should I continue to provide South Bay Expressway with goods and services if I have pre-petition claims?
- Q: What is my current balance? What is my pre-petition balance?
- Q: Can’t you just give me some idea of how much I will get paid on the past bills?
- Q: Is it true that suppliers with outstanding pre-petition claims only get a few cents on the dollar for unpaid invoices?
- Q: If South Bay Expressway can’t pay me for pre-petition invoices, what assurances can be provided that I will be paid for post-petition goods and services?
- Q: Will the Company attempt to negotiate new terms now that it has filed?
- Q: Given the uncertainties of the situation, can I renegotiate my terms with South Bay Expressway?
- Q: I understand that companies that file for Chapter 11 are able to put some suppliers on a “Critical Vendors List” that allows them to continue to be paid under normal terms, even for invoices that are unpaid at the time of the filing. How can I get on that list?
- Q: When will I receive payment for goods and services delivered after the bankruptcy date?
- Q: What if I only want to be paid cash on delivery?
- Q: Can I take back my goods?
- Q: Can I raise my product prices?
Utility Specific Questions
- Q: Do you intend to pay my pre-petition balance?
- Q: If you don’t pay my balance, the Utility Company will discontinue services.
Customer Questions
- Q: Will the filing impact the way you provide your customers with products and services?
- Q: How can I get additional information?
Answers
General Questions
- Q: What is Chapter 11?
- A: Chapter 11 of the U.S. Bankruptcy Code is a legal mechanism for court supervised reorganization for restructuring of the company's obligations. Chapter 11 provides a way for companies to address their financial issues in order to become a viable entity, while continuing day-to-day operations.
- Q: Why did South Bay Expressway file to reorganize under Chapter 11 of the U.S. Bankruptcy Code?
- A: The Company is taking this action to make significant improvements to its capital structure to become a more financially healthy company that is well positioned to meet the current market challenges and deliver on its long-term growth plans.
The Company took this step only after very careful consideration and consultation with experienced financial and legal experts. The Company decided that this would be the most effective path for South Bay Expressway—the path that would best protect and strengthen South Bay Expressway’s long-term value. - Q: Does this mean that South Bay Expressway is going out of business?
- A: Absolutely not. South Bay Expressway filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code in order to restructure its debt and to develop a long-term capital structure to support the on-going viability and growth of the Company. Our customers will see no change in service. South Bay Expressway is here for 35 years and we will continue to provide first-class service and a fast, reliable commute.
Going forward, suppliers will be paid under normal terms for all goods and services provided after the filing. South Bay Expressway is confident that following this process, it will emerge a stronger, more financially healthy company, which will mean it will be a stronger partner for you. - Q: Does South Bay Expressway have enough cash to stay in business?
- A: Yes. Our revenues are more than sufficient to meet our ongoing operating expenses.
- Q: How long will the reorganization process take?
- A: There is no way to predict today with certainty how long the process will ultimately take, though cases frequently range from one to two years.
- Q: Which entities are included in the filing?
- A: South Bay Expressway, L.P. and its General Partner, California Transportation Ventures, Inc. are included in the filing.
- Q: Is the toll road going to close?
- A: No. Our customers will see no change in service. South Bay Expressway is here for 35 years and we will continue to provide first-class service and a fast, reliable commute to our 25,000 daily customers.
- Q: Where can I find Chapter 11 case information?
- A: Please refer to the Company’s restructuring website at: http://dm.epiq11.com/sbx.
Supplier Specific Questions
- Q: Will suppliers continue to be paid for goods and services they provide to Company?
- A: The Company intends to pay suppliers and vendors under normal terms for goods received and services rendered after the filing on March 22, 2010. Any claims for goods received or services rendered after the filing date are considered “administrative claims,” which receive a priority status.
Suppliers who provided goods or rendered services to South Bay Expressway prior to the filings on March 22, 2010 may have what are referred to as “pre-petition claims.” These claims cannot be paid at this time and will be addressed through a Chapter 11 plan of reorganization that will be filed later in the case. If you have such pre-petition claims, you will receive additional information from the Company’s claims agent at a later date. South Bay Expressway sincerely regrets the hardship or inconvenience that this may cause your company. - Q: I have unpaid invoices dated before the bankruptcy date (i.e., pre-petition invoices). What should I do?
- A: Once the Bankruptcy Court has confirmed the procedures and deadlines for filing claims, you will receive a proof-of-claim form and instructions on how to file the form.
- Q: Will I need a claim form, or will I automatically be paid for the outstanding, pre-petition amount owed to me?
- A: At some point in the case, every creditor will receive a copy of a Bar Date Notice which will be accompanied by a proof of claim form with instructions as to deadlines, etc. If you have any questions regarding filing a claim, please seek legal counsel.
- Q: Why can’t the Company pay me what I am owed?
- A: United States bankruptcy laws generally prohibit the payment of all unpaid invoices incurred before the company filed. South Bay Expressway sincerely regrets the hardship or inconvenience that this may cause your company.
- Q: Why should I continue to provide South Bay Expressway with goods and services if I have pre-petition claims?
- A: There are really 3 reasons to maintain your business relationship with the Company:
- Priority status of post-petition claims. Amounts owed for goods or services delivered after the bankruptcy filing are deemed “administrative liabilities.” The Judge overseeing the case requires the Company to pay all administrative liabilities under the terms and conditions governing the transaction. Simply stated, the Company must pay for goods and services that it receives in the ordinary course of business after the filing. Also, it is important to understand that pursuant to the United States Bankruptcy Code, suppliers are required to fulfill all contractual obligations to South Bay Expressway.
- Maximizing the value of your pre-petition claim. The value of all pre-petition claims is highly dependent on the success of the Company during the reorganization process. The success of the Company during this period is in large part due to the support of the supplier community. Therefore, each supplier has the opportunity to affect the value related to its outstanding balances at the time of filing.
- South Bay Expressway expects to emerge from Chapter 11 a much healthier Company. The Company views this as an opportunity to expand its business relationships. South Bay Expressway values its relationship with its suppliers and feels it is important to continue working together.
- Q: What is my current balance? What is my pre-petition balance?
- A: The Company cannot provide current balances outstanding at this point because the Company is in the process of reviewing all of its records and separating pre- and post-petition invoices. However, within the next few months, South Bay Expressway will be filing a “Schedule of Assets and Liabilities.” In this document, the Company will list balances it believes are owed to its creditors. If you have further questions about this, please contact your company’s legal advisor.
- Q: Can’t you just give me some idea of how much I will get paid on the past bills?
- A: South Bay Expressway’s relationships with its suppliers and vendors are key to the future success of the Company, and the Company greatly appreciates your business. While South Bay Expressway cannot promise what the amount of payout will be on your claims, you can be sure that the Company will do everything it can to achieve the maximum recovery for all creditors. South Bay Expressway sincerely regrets the hardship or inconvenience that this may cause your company.
- Q: Is it true that suppliers with outstanding pre-petition claims only get a few cents on the dollar for unpaid invoices?
- A: At this time, South Bay Expressway is not able to estimate what value a general unsecured claim will have in its Chapter 11 cases. South Bay Expressway sincerely regrets the hardship or inconvenience that this may cause your company.
- Q: If South Bay Expressway can’t pay me for pre-petition invoices, what assurances can be provided that I will be paid for post-petition goods and services?
- A: In the U.S., all claims for goods and services delivered on or after the filing date of March 22, 2010 are considered administrative claims against the Company’s bankruptcy estate. This means that the Company is allowed—and indeed obligated—to pay you in full and according to normal terms.
- Q: Will the Company attempt to negotiate new terms now that it has filed?
- A: South Bay Expressway will continue to review the benefits and opportunities it has to improve its overall supplier relationships in the normal course of business. This will depend on the goods or services individual suppliers provide and the terms in place at the time of filing. South Bay Expressway would anticipate that all supplier terms will be at normal market levels.
- Q: Given the uncertainties of the situation, can I renegotiate my terms with South Bay Expressway?
- A: The Company cannot pay more for goods and/or services at this time. Its ability to purchase from you on favorable terms and at competitive prices is critical. South Bay Expressway expects in the months and years ahead to remain a good customer to you.
- Q: I understand that companies that file for Chapter 11 are able to put some suppliers on a “Critical Vendors List” that allows them to continue to be paid under normal terms, even for invoices that are unpaid at the time of the filing. How can I get on that list?
- A: A motion was filed seeking to pay the prepetition claims of certain vendors. Although the Company feels as if all of its suppliers are “critical,” the courts have placed very strict parameters on those vendors that can be paid at this time. If you feel as if you meet these parameters you should contact your legal counsel and they should write a letter to South Bay Expressway’s Chief Accounting Officer explaining why you think you qualify.
- Q: When will I receive payment for goods and services delivered after the bankruptcy date?
- A: All goods and services delivered after the bankruptcy filing date of March 22, 2010 will be paid according to established terms.
- Q: What if I only want to be paid cash on delivery?
- A: South Bay Expressway will continue to pay supplier invoices under normal terms. The Company believes it is in the best interests of its suppliers to maintain business as usual.
- Q: Can I take back my goods?
- A: No. South Bay Expressway understands your frustration, but bankruptcy law prohibits a seller from repossessing goods after a purchaser has filed. The Company recommends that you consult with your legal counsel before taking any such action.
- Q: Can I raise my product prices?
- A: The automatic stay provision associated with Chapter 11 filings prevents you from raising your prices in an effort to recoup pre-petition claims. Should you have a business reason to raise prices other than the Company’s filing itself, you can communicate with your usual contact at South Bay Expressway who will collect the requisite information from you and determine if a price change can be approved.
Utility Specific Questions
- Q: Do you intend to pay my pre-petition balance?
- A: Unfortunately, federal bankruptcy laws generally prohibit South Bay Expressway from paying outstanding invoices for goods and services received before the filing date of March 22, 2010. The company sincerely regrets the hardship this may present you, and asks you to look to the future as this relationship continues.
- Q: If you don’t pay my balance, the Utility Company will discontinue services.
- A: The Bankruptcy Code prohibits utilities from discontinuing service within the first 20 days of a bankruptcy. The Company has filed a motion in the Bankruptcy Court addressing how to provide utilities with adequate assurance to ensure continued service. A copy of the motion is available via a link on the Restructuring section of the company's website.
Customer Questions
- Q: Will the filing impact the way you provide your customers with products and services?
- A: No. Our customers will see no change in service; we will continue to offer a fast, reliable drive for our 25,000 daily customers.
- Q: How can I get additional information?
- A: Further information will be posted as available on the Company’s restructuring website http://dm.epiq11.com/sbx.