Shuttered shipping company files Chapter 7 bankruptcy liquidation

Declining demand, high interest rates, and rising inflation led to financial distress for shipping company businesses over the last two years.

The freight trucking industry recession has been so severe, that shipping companies which have been hit the hardest have taken the final word step in filing for Chapter 7 liquidation, in place of Chapter Eleven reorganization.

Related: Popular Asian restaurant chain files for Chapter Eleven financial disaster

Freight forwarder company Boateng Logistics closed down after the firm on Feb. 22 filed for Chapter 7 financial disaster with plans to liquidate, and Ninety two-year-old trucking company Arnold Transportation Services and products laid off all of its employees and shuttered operations five days before filing for Chapter 7 liquidation on April 30.

U.S. Logistics Solutions, a shipping company owned by inner most equity firm Ten Very well Group, shut down operations, laid off its employees, and on June 21 filed for Chapter 7 financial disaster within the U.S. Financial disaster Court for the Southern District of Texas in Houston with plans to liquidate its assets.

Flex Intermodal files for Chapter 7 liquidation after closure

Eventually, Flex Intermodal, a California-based trucking company that shut down in August 2023, filed for Chapter 7 financial disaster liquidation on Sept. 13 as it lost its authorization to operate and is hampered by a few lawsuit judgments, FreightWaves reported.

The Fremont, Calif.-based shipping company, which at one time operated out of the Port of Oakland, Calif., listed up to $100,000 in assets and $1 million to $10 million in liabilities in its petition filed within the U.S. Financial disaster Court for the Northern District of California. The debtor indicated that it would now not predict to have sufficient assets to make payments to unsecured creditors.

Related: Major shipping company shuts down; no financial disaster filing yet

Flex Intermodal ceased operations in August 2023 after the Federal Motor Carrier Safety Administration revoked its authority to operate and its insurance company canceled its bodily injury property damage coverage. The federal regulator approved the corporate's operating authority in September 2018.

The company had 25 trucks and 30 drivers when it ceased operations, per FMCSA.

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The trucking company faced four lawsuit judgments entered against it by Equify Intermodal and Flexi Van Leasing within the Superior Court of Alameda County, Calif., and by Balboa Capital and Equify Financial within the Superior Court of Orange County, Calif., per FreightWaves.

The debtor is likewise the defendant in a May 9, 2024, lawsuit filed by Ally Bank within the Superior Court of Alameda County, which seeks to repossess a 2019 Freight Cascadia vehicle after Flex allegedly defaulted on a loan amount of about $eighty two,886, a $eight,061 in finance charge and about $496 in late fees.

The bank estimated the trade-in value of the vehicle to be about $Forty four,250.

Ally Bank is in search of possession of the vehicle; damages equal to the rental value of the vehicle from the date of default; damages for depreciation and deterioration of the vehicle; the principal amount, finance charges and late fees owed on the loan; and all late, repossession and investigative fees.

Lower than federal financial disaster rules, all pending litigation filed against Flex Intermodal is subject to an automatic stay while the debtor's Chapter 7 case proceeds.

The debtor's largest unsecured creditors encompass U.S. Small Business Administration, owed $2.eight million; Hemer Rousso & Heald, owed $213,000; and Balboa Capital, owed $210,000.

While the debtor has now not operated in 2024, it reported gross revenue of $1.2 million in 2023 and $1.9 million in 2022.

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