APL Cargo Seeking Financial Lifeline Amid Legal Troubles

Indiana-based trucking company APL Cargo is navigating choppy waters as it seeks a financial lifeline in bankruptcy court. The company's hoping to keep the wheels turning, but it's got some serious baggage to deal with.

The Money Crunch

• APL Cargo filed Chapter 11 on May 31, 2024

• Owes WEX Bank, its factoring and fuel card partner, over $2.3M in secured collateral

• Seeking court approval for post-bankruptcy financing deal

"The post-petition agreement is critical to [APL Cargo's] ability to maintain operations." - Weston Overturf, APL Cargo's attorney

The Players

• APL Cargo (main company)

• Indy National Leasing (affiliate)

• Ecosmart Trucks (affiliate)

• WEX Bank (fuel card and factoring partner)

Bankruptcy Timeline

• Creditors' meeting set for June 28, 2024

• Proof of claims deadline: September 26, 2024

Plus APL's Legal Mess: APL Cargo's trying to hit pause on two federal lawsuits:

1. The Mechanic's Nightmare

• Filed in Texas by Christian Velazquez

• Claims serious injury during roadside repair

• Alleges APL driver's negligence caused accident

1. The Driver Rebellion

• Filed in Indiana by former lease-purchase drivers

• Seeking class-action status

• Claims drivers were misclassified as contractors

• Alleges violations of labor laws and unfair leasing practices

"APL drivers who leased trucks or trailers from Indy National weren't allowed to use their equipment to work for other carriers without written permission from APL." - Lawsuit allegation

The Big Picture

• APL lists assets and liabilities between $1M-$10M

• 200-999 creditors in the mix

• Company claims funds will be available for unsecured creditors

APL Cargo's fighting a multi-front battle: scraping together cash to keep operating while fending off lawsuits that could seriously damage its reputation and finances.

Can APL pull off this high-wire act, or will it join the growing list of carriers forced to shut down in a tough market?

Source: FreightWaves