Richard Allen on Logistics Hub's Chapter 11: "It's a Good Project. It's Just a Timing Issue."
Over the last year, whenever I have spoken with Richard Allen, CEO of The Allen Group, he has been open at times, guarded at others. But I have to say today, when he and I talked about his entry into Chapter 11 bankruptcy, he sounded better than he has in some time -- more confidant and maybe even a little easier-going than in the past.
The Allen Group filed for federal bankruptcy protection last night under Chapter 11. That's the form of bankruptcy that allows management to hold on to a company while it negotiates understandings with creditors.
The Allen Group is the principal in Dallas's Inland Port Project, a 7,500-acre real estate development intended to become one of the continent's most important shipping and warehousing centers. Allen was adamant today that neither he nor his project is going away. "This is a single project that's going to be kept together," he said.
He said his support from the cities and other local entities is solid: "I have talked to the major political leadership, and everybody continues to be supportive. The capital and infrastructure support that we have received in the past is going to continue.
"I mean, hey, everybody understands that it's a good project. It's just a timing issue."
The timing, of course, has to do with lasting out a bad patch in the national economy. I had asked Allen a month ago about rumors the bad economy might force him to sell.
"The rumor that you asked me about previously was false. I can tell you honestly that I have had no conversations or discussions along those lines."
I get that a lot.
He said Chapter 11 is a good thing, under the circumstances. "It gives us time to restructure the debt and work with our creditors, and we have protection while that process is ongoing. Then we will emerge with a new debt structure, and at that point we go forward and execute on the business plan."
He said his own company, which experienced major management layoffs several months ago, will continue as it is now. "It's business as usual," Allen said. "The same management team, same employees and the same group that's in charge, so no change there."
Allen said he will continue in his own hands-on role running the business. "I'm not going anywhere," he said. "I'm not going off to hide under a rock. We'll be here, working away, and it's going to be business as usual."
I asked him about the timing for filing Chapter 11.
"Usually from what I understand it's six months, give or take," he said. "And that's when you work with your creditors. Then once you've restructured, there's a period of time to execute on that."
"Whether that's three years, four years, five years, that's really up to the court. It's a substantial amount of time to orderly proceed with business."
Allen's emphasis was on that word: orderly.
"It's not a fire sale situation," he said. "It's business as usual."
Guaranteeing that orderliness, he said, is the political support his project enjoys from the communities where it is being developed.
"Everybody has been very very supportive of the project," Allen said. "All the cities and the political support, that's not going anywhere. They understand the importance of the project to the region and to South Dallas County."
I asked Allen about reports I had read of a surge in exports headed this way in recent months from the Pacific Rim, and he said he's been reading the same thing.
"From what I have read," he said, "the container shipments are up, and that's a positive. I think both the Union Pacific Railroad and Burlington Northern Santa Fe are seeing 8 or 9 percent growth in December and the first part of January, from what I've read. So that's a positive. That's where it starts."
Allen said the economy is still tough, but he said that can be a good thing too. "We still have challenges in the economy. But, hey, the people that are doing things now are doing them at the right time. I think we're at the bottom of the trough."
He said that's how he got started in Dallas. "The way I got in this business was during our last recession. I had sold a business and had capital, so I was buying at the bottom.
"Anybody who does deals now, I believe, is going to be taking advantage of the same situation."
Kind of like, C'mon in, the water's still cold. Man. Wish I had a swimsuit. Maybe a wet suit even.