In a stunning turn of events, California-based trucking company Kal Freight Inc. has filed for Chapter 11 bankruptcy protection, unveiling a web of fraudulent activities that have sent shockwaves through the industry. The company faces serious allegations of financial misconduct and asset mismanagement.
Who is Kal Freight?
According to a filing with the Federal Motor Carrier Safety Administration, Kal Freight employs 600 drivers and has 580 power units. The company was founded in 2014 and has locations in California, Texas, New Jersey, Indiana, Tennessee, Georgia, Arizona and Arkansas.
Chapter 11 and fraud accusations
Kal Freight filed Chapter 11 with nearly $325 million in long-term debt. Unsecured claims total at least $24 million, according to court filings. Among the largest unsecured creditors are CIMC Reefer Trailer Inc., owed more than $12 million; Continental Tire, owed more than $1 million; and Cargo Solution Express, owed more than $950,000.
However, court documents reveal a far more troubling picture of Kal Freight’s operations. Daimler Truck Financial Services USA, LLC, the company’s largest vehicle finance lender, has uncovered evidence of massive fraud perpetrated by Kal Freight against its creditors.