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Schneider National paid $57 million in the third quarter for a lawsuit against a trucking company it acquired from a receiver in 2016.
The case involved trucking company Watkins & Shepard and its subsidiaries, which Schneider acquired as part of a push to grow first-mile and last-mile services. Raymond Kuntz, the former CEO of the Montana business, argued that Schneider did not provide an additional 60 tractors per year to grow the business as part of the deal.
The Delaware Supreme Court ruled on the breach of contract case in April, ruling against Schneider, and the defendant paid a $40 million settlement and other costs in July, totaling $57 million. the total.
As part of the sale, former owners may receive additional compensation if earnings targets are met. The company has benefited from the explosive growth of e-commerce and is the “largest specialty furniture retailer and the second largest specialty carpet retailer in the United States,” according to a case summary.
The court interpreted the evidence in the action, including a portion of the bargaining model struck by Schneider, and found that the defendant should not only replace, but also add 60 tractors. per year for acquired businesses, according to the opinion of the court.
In 2019, Schneider’s board of directors approved the closure of its first-to-last mile services, which the court summarized, writing, “Schneider’s attempt to create a network first-to-last-mile truck by getting W&S at the end and ending with nothing. .”
The defendant has seen settlement charges in quarterly filings this year. Despite the $57 million hit, its Q3 release said its adjusted earnings from operations reached $468.7 million for the first nine months of 2022.
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