A California-based truckload carrier has filed for Chapter 11 bankruptcy protection.
Kal Freight Inc., which is headquartered in Fontana, California, filed its request in United States Bankruptcy Court for the Southern District of Texas. Thursday, Dec. 5.
Court documents show it owes some $325 million to creditors, including Daimler, TBK Bank and Bank of America.
In a statement, the company said, "Kal Freight intends to fund the chapter 11 process with debtor-in-possession financing, which will provide the company with the necessary liquidity to maintain normal operations while it undertakes certain key operational restructuring initiatives and emerge as a stronger enterprise positioned for long-term success. The company intends to continue paying its employees in full in the ordinary course, as well as paying its vendors and suppliers in full under normal terms for goods and services provided on or after the filing date."
Court documents said Kal Freight plans to "reorganize around their core trucking business and to wind down their non-core parts and tires businesses and liquidate certain real estate assets."
In its filing, Kal Freight said it plans to "continue to serve its customers and trade partners and ensure the safety of its employees and fleet operations."
Kal Freight, which was founded in 2014, has 800 drivers, 800 trucks, and 2,200 trailers. It operates seven terminals.
In addition to the trucking business, Kal Freight added a truck and trailer sales business, as well as one selling aftermarket parts for trucks and trailers.
During the COVID-19 pandemic, the company “invested heavily” in trucks and trailers to meet surging shipping demand. As the pandemic receded and freight demand fell off, Kal Freight was unable to pay its bills, according to court documents.
