💥New Chapter 11 Bankruptcy - Kal Freight Inc.💥
Trucker files for bankruptcy after fraud allegations fly.
Back on December 5, 2024, KAL Freight Inc. and four affiliates (the “debtors”) filed chapter 11 bankruptcy cases in the Southern District of Texas (Judge Lopez).
The debtors have four business lines:
KAL Freight is the flagship business line and offers transportation and logistics solutions. The business operates a fleet of 800 trucks and 2.2k trailers over a network of seven terminals.
KAL Partz specializes in supplying 150k SKUs worth of heavy-duty aftermarket truck and trailer parts.
KAL Trailers is a distributor and retailer of heavy-goods vehicles. In ‘23 the business leased and sold ~85 trucks and ~79 trailers through its network of six dealerships.
KVL Tires is a commercial tire dealer. As of the petition date, this business segment does not have any brick-and-mortar locations and does not have any employees.
Stop us if you’ve heard this before: the core business boomed during COVID as people engaged in hyper online-retail therapy after dealing with their annoying spouses and kids all day, every day. During the pandemic, the debtors invested in more trucks and trailers (at inflated prices) to meet the increased demand. Once the pandemic ended, however, customer demand trailed off and the debtors found themselves severely over-leveraged due to their poorly timed spending spree. It’s crazy, when you look back, at how over-indexed everyone got to the “it’s a new paradigm” narrative amidst the pandemic. This is especially salient now as Jamie Dimon drops the WFH-is-over hammer on JPMorgan Chase & Co.’s ($JPM) employees. 😢