A Texas trucking company recently filed for Chapter 7 bankruptcy as it liquidates its assets after shutting down operations due to financial difficulties.
According to Freight Waves, Sunset Logistics Inc., which is based in Irving, Texas, and five of its affiliates filed for Chapter 7 bankruptcy protection as part of an effort to liquidate assets. The outlet noted that Sunset Logistics filed a bankruptcy petition on October 3 in Dallas in the U.S. Bankruptcy Court for the Northern District of Texas. The trucking company had ceased operating on September 29 due to rising costs, low freight rates, and the current state of the U.S. economy.
Freight Waves reported that the affiliated companies that also filed for Chapter 7 bankruptcy included Mobile Fleet Marking Inc., Sunset Express Inc., Sun-Tech Leasing of Texas, Glidewell Leasing Co. LP, and Glidewell LLC.
In the recent bankruptcy court filings, Sunset Logistics and its five affiliated companies claimed they were “unable to continue without debt relief.” Sunset Logistics reported between $10 million and $50 million in liabilities and up to $1 million in assets as part of its bankruptcy petition.
According to Freight Waves, Porter Capital, which is based in Birmingham, Alabama, previously filed a lawsuit against Sunset Logistics and its affiliates, claiming that the companies defaulted on a recourse factoring agreement and that the companies owe Porter Capital over $5 million, in addition to accruing costs and expenses. The outlet noted that the Chapter 7 bankruptcy filings will temporarily pause the civil litigation with regard to Porter Capital’s lawsuit.
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Freight Waves reported that Sunset Logistics’ bankruptcy filing did not include a schedule of its liabilities and assets or the trucking company’s statement of financial affairs, which were due last Thursday. As a result, the company filed a motion to request a deadline extension until October 31. The motion said that Sunset Logistics and its affiliates “must compile information from books, records, and documents relating to the claims of dozens of creditors.”
“Given the scope of the [companies’] operations and the interrelated nature of these Chapter 7 cases, it will take some time to gather and process such information,” Sunset Logistics’ motion added.
According to The Street, Sunset Logistics previously conducted operations with 90 truck drivers and 90 power units. The outlet said that as of the middle of October, Sunset Logistics allegedly had failed to give its drivers their final paychecks or refund $1,000 in maintenance and escrow account funds.
