REA Files Petition For Reorganization
ÛÓREA Express, Inc., the nationÛªs major private surface and air delivery service, filed a petition for reorganization today under federal bankruptcy laws. Its board chairman blamed ÛÏeffects of the recession.Û</br></br>REA, which in 1969 succeeded the railroad-owned Railway Express Agency, said it would continue normal operations while working out a plan to pay debts and reorganize.</br></br>Under Chapter II of the Bankruptcy Act, REA will get court protection against its 43,000 creditors, mainly railroads, airlines and banks. With the help of the court, the firm and its major creditors will work out a plan to pay its outstanding debts and to restructure its organization.</br></br>A spokesman said that employment would continue and terminals would remain active while the company restructures under the guidance of a federal bankruptcy judge, John J. Gal-gay.</br></br>Board chairman Tom Kole said that when the company wu formed in 1969, it was losing $50 million a year, but that by reducing costs REA turned an operating profit of $2.8 million in 1974, the first such profit in nine years.