Peoria Charter Coach filed for Chapter 11 bankruptcy on Thursday, a setback for a venerable Peoria-based business that serves thousands of customers a year.
The company filed its petition for Chapter 11 in U.S. Bankruptcy Court for the Central District of Illinois, filing under Subchapter V of Chapter 11, considered a more streamlined way for small business with less than $2.75 million in assets to file for bankruptcy.
James Wang, owner of Peoria Charter Coach, said in a statement to the Journal Star that the primary reason they filed for restructuring under Subchapter V was because they had not made the final balloon payment on a COVID-19 loan they received through the Main Street Loans Program of the CARES Act. The business will continue to operate.
“Because of the MSLP and similar programs, we avoided mass firings and continued to pay our employees,” Wang said. “Unfortunately, the MSLP interest rate more than doubled over time, from 3.1 percent to 8.5 percent, and the final balloon payment became unmanageable before the December 11, 2025, deadline. We are not alone; there are many small businesses across the country which are facing this same COVID hangover.”
Peoria Charter stated in its filing with the Central District that it had between $1 million and $10 million dollars, with fewer than 50 creditors. All funds will be made available to any unsecured creditors after the bankruptcy process.
“It is a tool to reorganize, not shut down,” Wang said. “Our employees, our services, and our standards of quality remain unaffected. We are still here. Still running buses. Still committed to safety, reliability, and the communities we serve.”
Wang said that with the exception of the final balloon payment, they had paid all of their bills on time. He noted that the company had 48 creditors, with federal rules requiring that they list all of the people they have paid in the last 90 days.
The company said it did not have any other bankruptcy cases filed against them within the past eight years, nor do they have any other pending bankruptcy proceedings against them.
Established in 1941 as a way for Caterpillar workers to commute to various cities and communities across the state before and after work, Peoria Charter Coach serves over 400,000 passengers, operating out of facilities in Peoria, Champaign-Urbana and Chicago. In particular, the company is well-known for connecting college students from the Chicago suburbs and the city proper to universities like the University of Illinois Urbana-Champaign and Bradley University.
Wang noted that Peoria Charter continued operating during the Thanksgiving weekend snowstorm that dumped over 10 inches of snow in some areas of the state, transporting around 8,000 students from the suburbs to the U of I in spite of bad road conditions.
In addition to connecting people to cities across Illinois, the company also provides charters across the country for groups and special events.
Wang said that Peoria Charter remained a healthy company despite the need for restructuring, with strong day-to-day operations, profitability and a good cash flow, well-positioned for continued growth due to their strong regional demand.
He said that going through the Subchapter V process will allow them to avoid liquidation – something they would have been required to do if they went with Chapter 7 bankruptcy – and remain in full operation while they worked out a repayment plan.
This article originally appeared on Journal Star: Peoria bus business files for bankruptcy, will continue to operate
Reporting by Zach Roth, Peoria Journal Star / Journal Star
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