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RailWorks loses chairman, COO; gains consultants to help ward off financial woes


RailWorks Corp. Aug. 20 lost two top executives and announced that the company's second-quarter net loss wouldn't satisfy its debt agreement requirements — likely leading to default.

Chairman John Larkin and Chief Operating Officer Michael Azarela resigned. The company June 5 had named board member and former COO John Kennedy chief executive officer to succeed Larkin, who planned to remain board chairman and focus solely on strengthening the company’s balance sheet.

Meanwhile, RailWorks hired investment banking group Dresdner Kleinwort Wasserstein as a consultant to advise the company on its financial alternatives. The company Aug. 13 received a notice of default from its bank group.

RailWorks also named Shaun Donnellan, president of financial consulting firm Glass & Associates Inc., chief restructuring advisor.

The company recorded a $38.1 million second-quarter net loss — or $2.48 per share — including $33.7 million in charges. By contrast, RailWorks in second-quarter 2000 posted $5.4 million in net earnings — or 35 cents per share.

Contact Progressive Railroading editorial staff.

More News from 8/20/2001