When a trucking company shuts down, it usually has a wind-down period when it delivers any remaining loads in its possession. Not doing so leaves thousands of people in limbo, since they don’t know whether their orders will ever arrive.
The problem can be even worse when items being delivered have an expiration date or might otherwise become less valuable, or even worthless, if they sit.
In some cases, items in mid-transit become an even bigger hassle, as customers have paid for the delivery, but whoever ends up owning the assets of the bankrupt freight company has no obligation to deliver.
A similar issue arose when furniture company Mitchell Gold + Bob Williams went bankrupt in 2023. Customers had paid it for delivery, but that payment had not been sent to its shipping partners.
Ultimately, the bankruptcy court allowed Ryder Last Mile and other freight companies to charge the customers again if they wanted their goods.
In the case of Montgomery Transport, which filed for Chapter 7 bankruptcy protection on Oct. 9 and immediately shut down, the fate of its in-warehouse and in-transit deliveries remains in limbo.
Montgomery Transport is the “largest trucking bankruptcy this year”
Montgomery Transport LLC, a Birmingham, Alabama-based flatbed trucking company, filed for Chapter 7 bankruptcy and immediately ceased operations. That leaves about 1,000 employees out of work and the fate of anything the company was shipping uncertain.
The company described its business on its website.
“Montgomery Transport is a leading flatbed carrier in the nation specializing in the safe transport of over dimensional freight. Our company is built around understanding the unique needs of our customers and our drivers. That means state-of-the-art safety technology, well-maintained equipment, high standards for quality, and strong relationships,” the company shared.
It then follows with a statement that now rings hollow, given the Chapter 7 bankruptcy filing and the abandonment of its remaining loads:
We treat every haul like it’s the most important one on the road — because to us, it is.
Montgomery Transport
Montgomery Transport Chapter 7 bankruptcy
- Montgomery Transport LLC (based in Birmingham, AL) filed for Chapter 7 bankruptcy and ceased operations immediately.
- The filing followed a failed sale to P & S Transportation.
Source:LinkedIn - Approximately 1,000 employees are now out of work as a result of the shutdown.
- “This is the largest trucking bankruptcy of the year,” according to Craig Fuller, a freight industry expert, posting on X, the former Twitter.
- The abrupt closure suggests no “wind-down period.” Operations ceased as of the bankruptcy.
Source: FreightWaves
Montgomery Transport shutdown was abrupt
While people responding to Fuller’s post on Twitter said they saw this coming, many did not.
“The sudden shutdown has left hundreds of drivers stranded across America as the company’s leadership instructed them to halt operations. This abrupt closure represents a significant disruption in the trucking industry and has created immediate challenges for both drivers and clients dependent on Montgomery’s freight services,” Freightwaves reported.
The company’s owner One Equity Partners had entered into negotiations with P and S Transport to sell Montgomery Transport, with a closing date of Sept. 30. Those plans were derailed by a Sept. 26 lawsuit.
Shutterstock
Montgomery Transport/Baez personal injury lawsuit
- Baez et al. v. Montgomery Transport, LLC et al. — Civil tort/personal-injury case filed in the Southern District of Texas
Case No.: 4:21-cv-02546Judge: Lynn N. Hughes
Nature of suit: 360 (Torts — Personal Injury — Other)Source: PACERMonitor listing
The lawsuit halted the sales process, according to Freightwaves.
“With the traditional purchase agreement derailed, the company attempted to proceed with the sale through Chapter 11 bankruptcy proceedings. By October 8, the situation deteriorated further when creditors failed to reach consensus terms, forcing the company to convert to Chapter 7 bankruptcy and shut down operations completely,” the website shared.
What’s next for Montgomery Transport?
Drivers will be paid for work already performed, according to Montgomery Transports, but after that, not much is known.
Loads that were in transport are expected to be delivered, and drivers have been promised pay for those trips.
“The company directed drivers near the Birmingham terminal to return there, while those closer to their homes were told to return home and await further instructions. Despite these provisions, the sudden closure leaves significant uncertainty regarding final payments, benefits, and other employment-related matters,” Freightwaves added.
The filing includes the entire Montgomery Transport Group.
“Every now and then one of these happens and it’s shocking. This is one of those,” shared Cale Pearson, a seasoned transportation leader, on LinkedIn.
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