Dive Brief:
- Kal Freight is working to settle more than $335 million in debts through liquidation, rather than reorganization as initially anticipated, according to court documents.
- After shedding many of its trucks and trailers in recent months, Kal Freight is now selling real estate assets, including two properties in California.
- In California, the company has listed a 10,000-square-foot terminal with five truck bays in Fontana. There’s also a vacant 3-acre property up for grabs in Buttonwillow.
Dive Insight:
After filing for Chapter 11 bankruptcy protection in December, Kal Freight and several of its secured lenders — Triumph businesses, TBK Bank, Wells Fargo plus Bank of America and Daimler subsidiaries — reached a settlement agreement in March.
The carrier’s Chapter 11 bankruptcy liquidation plan was approved by Judge Christopher Lopez of the U.S. Bankruptcy Court for the Southern District of Texas in April.
The Arlington, Texas-based carrier agreed to an orderly return of over 1,500 trucks, trailers, dry vans and other vehicles to the lenders. Meanwhile, the lenders agreed to pay $2,500 per truck and $1,500 per trailer, in turn funding the company’s wind-down.
Additionally, Kal Freight sold $2.4 million in unnamed property and $925,000 in unnumbered trailers to Noor Transport in a transaction that closed in April. Notably, the principals of Kal Freight are admittedly affiliated with Noor Transport Leasing.
The proceeds from that sale, and any additional Kal Freight assets, will go to the liquidating trust, per the court-approved plan. Then, the liquidating trustee will distribute all net proceeds to the company’s creditors in order of priority.
Among the company’s creditors with the largest unsecured claims is CIMC Reefer Trailer, which is owed $12.7 million. Continental Tire of America and All Solutions Insurance Agency each have unsecured claims exceeding $1 million.
Earlier this year, the company arranged to sell multiple parcels across 13.67 acres in Benton County, Arkansas, to 3B Storage for $3 million.
Kal Freight had $172.9 million in assets as of April 18, according to an operating report, suggesting the company still had a ways to go to repay its debts.
