Kal Freight Adds Directors After Being Accused of Malfeasance
[Stay on top of transportation news: Get TTNews in your inbox.]
A judge approved adding independent directors to Kal Freight’s board and other corporate governance changes after the bankrupt trucking firm was accused of double-pledging its trucks as collateral to obtain financing from U.S. and Canadian lenders.
Judge Christopher Lopez said Dec. 11 that he’d approve appointing Robert H. Warshauer and John Young Jr. as directors as well as other measures meant to limit the influence of the trucking company’s owner, Kalvinder Singh. The request was granted days after Kal Freight filed Chapter 11 with nearly $325 million in long-term debt.
Kal Freight’s lenders and former business partners have accused the firm of malfeasance. In a California lawsuit earlier this year, two former business partners claimed Kal Freight duplicated vehicle identification numbers on trucks and trailers that had already been used as collateral on loans to secure additional financing.
Vehicle finance lender Daimler Truck Financial Services USA claimed California-based Kal Freight “perpetrated a massive fraud” on creditors, according to court papers. The lender has alleged Kal Freight transferred trucks and trailers included in Daimler’s collateral and sold those units to third parties, free and clear of its liens.
Lori Heino-Royer of Waabi discusses the latest developments, breakthroughs and key industry partnerships in autonomous trucking. Tune in above or by going to RoadSigns.ttnews.com.
Kal Freight Chief Restructuring Officer Bradley Sharp, who was engaged by the company in September, testified Dec. 11 that Singh didn’t oppose adding the directors or restrictions on his ability to remove them from the board.
Singh couldn’t be reached Dec. 11 and didn’t appear at the hearing or respond in court to the requests approved by Lopez. Attorneys representing Singh in a wrongful termination suit filed in June against Kal Freight did not respond to requests for comment.
In an earlier court filing, Sharp said Kal Freight has been subject to various allegations of inappropriate accounting practices and claims that personnel improperly moved trucks and trailers from the U.S. to Canada and improperly titled its vehicles. The company has said it intends to use Chapter 11 “to transparently restructure” Kal Freight and wind down some of its businesses, according to court documents.
Want more news? Listen to today's daily briefing below or go here for more info:
