Trucking companies continue collapsing and folding up operations as decreased demand for shipping has led to lower freight rates, while inflationary conditions over the last two years has also led to higher operating costs. To compound matters, interest rates rocketed over this period, increasing the cost of companies' debt obligations.
All of this financial distress has forced shipping and logistics companies into out-of-court restructurings or bankruptcy court filings to reorganize their businesses, sell their assets as a going concern, or liquidate and shut down their operations.
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Irving, Texas, trucking company Sunset Logistics Inc. and its affiliates were among the struggling shippers in 2024 that fell into financial hardship and needed to file for Chapter 7 bankruptcy protection to liquidate their assets after ceasing operations.
Related: Struggling trucking company files Chapter 7 bankruptcy liquidation
Sunset Logistics on Oct. 3 filed its petition in the U.S. Bankruptcy Court for the Northern District of Texas in Dallas following a shutdown of all operations on Sept. 29, blaming a bad economy, low freight rates, and rising costs.
The debtors said they couldn't continue operating without debt relief. They also faced a lawsuit filed in April 2024 in the U.S. District Court for the Northern District of Alabama from their factoring company Porter Capital of Birmingham, Ala., alleging Sunset Logistics and its affiliates owed it $5 million, plus accruing costs and expenses, from a defaulted recourse factoring agreement.
The Chapter 7 filing placed an automatic stay on all litigation while the bankruptcy case proceeds.
Other logistics companies that filed for Chapter 7 bankruptcy liquidation facing financial distress include freight forwarder company Boateng Logistics, which ceased operation after it on Feb. 22 filed for Chapter 7 bankruptcy with plans to liquidate. Also, 92-year-old trucking company Arnold Transportation Services laid off all of its employees and shuttered operations five days before filing for Chapter 7 liquidation on April 30.
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Mighty Move Transportation liquidates in Chapter 7
Defunct Illinois shipping company Mighty Move Transportation, which operated with 70 power units and 75 drivers, on Oct. 24 filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the Northern District of Illinois.
Related: Distressed luxury sportscar maker files Chapter 11 bankruptcy
The Dolton, Ill., debtor did not give a reason for its filing in its petition, but the company faced two breach of contract lawsuits, one filed by Apollo Funding in September and another filed by DMKA LLC, also known as The Smarter Merchant, in October, according to FreightWaves.
All litigation filed against the debtor is subject to an automatic stay.
More bankruptcy news:
- Huge truck rental company files for Chapter 11 bankruptcy
- Troubled retailer closes more stores in Chapter 11 bankruptcy
- Iconic Home Depot hardware rival files Chapter 11 bankruptcy
Mighty Move Transportation, which began operating five years ago, hauled general freight, beverages, paper products, liquids, and gases. The company also had facilities in Fort Wayne, Ind., in addition to its Dolton headquarters.
The debtor listed up to $50,000 in assets and $500,000 to $1 million in liabilities, including about $194,000 owed to RTR Recovery of New York; over $113,000 owed to The Fundworks of Salt Lake City; and over $102,000 owed to Apollo Funding of East Rochester, N.Y.
Mighty Move Transportation generated about $2.3 million in revenue from Jan. 1 through Oct. 24. It earned about $4.5 million in 2023 and $4.7 million in 2022.
Related: Veteran fund manager sees world of pain coming for stocks
