By Clarissa Kell-Holland
“Oh, what a tangled web we weave when first we practice to deceive.”
– Sir Walter Scott
Attorneys and forensic accountants, along with some former Arrow Trucking employees, are still sifting through the financial nightmare more than two months after the Tulsa-based company’s abrupt collapse.
In December 2009, the Tulsa, OK-based motor carrier unexpectedly shuttered its doors and left several hundred drivers stranded all over the country, some under loads with no fuel, no way to get home, and no guidance from company executives. Instead, the trucking community banded together to get these drivers home.
Now, Arrow’s bankruptcy trustee, Patrick J. Malloy III, and others he has hired are painfully reconstructing invaluable financial records. Former top executives with Arrow Trucking have remained silent since the shutdown and bankruptcy filing.
“The trustee’s foremost duty right now is to identify, secure and maximize the value of the assets of the estate,” said Glen L. Work, Malloy’s associate. “At this point, we are still in the identifying and securing phase.”
He added that Malloy has said publicly that this is the worst he’s ever seen in his 35 years as a bankruptcy trustee.
And the lawsuits are piling up against Arrow Trucking and its top executives.
Layers of deception,
One former Arrow Trucking employee told Land Line in January she was “aware of a lot of things” leading up to the company’s demise, including the company’s double-billing practices under the watch of Chief Financial Officer Jonathan Moore.
“I was aware of a lot of things that were going on, but it would be presented to me by the higher-ups that we’re just having to do this right now because we have to buy fuel for our trucks or we’ve got to make payroll,” the former billing department employee said. “I didn’t know how bad off the company was, but I knew money was tight.”
The former employee who didn’t want to be named said she was aware the company was in severe financial trouble, but she was being told that “we were going to get through this.”
She said her former employer had an elaborate system in place to send “inflated invoices” to their lender, Transportation Alliance Bank – or TAB – of Ogden, UT, who factored their invoices. She said there was also a separate billing system for their customers.
“The first invoice would be the invoice number and the letter A. Those were the inflated invoices, which would be sent to the bank. Then a second invoice that started with the invoice number and the letter B would be created for the correct amount, and that is what was sent to the customer,” she explained. “We would then send TAB an electronic file every day of the billing, but only for the letter A invoices. The letter B invoices would not get sent to TAB in the electronic file.”
Then, in early December 2009, she was told that a representative from TAB had arrived and would be sitting with her to go over the company’s billing processes. That’s when she first had an inkling that the company may not survive.
“By this time Jonathan Moore had already been fired, and someone from another department was brought in and promoted,” she said. “My instructions from my new boss were to tell them (TAB) everything I knew and show them our billing processes, which I did.”
In January, she worked jointly with TAB to finish customer billing. She said it wasn’t nearly as bad as she and others anticipated because many of the drivers had turned in their paperwork up until the last day.
She said anything that was “questionable” wasn’t billed because “chances are most of it didn’t get delivered.”
“I wish I could help get everybody paid. And maybe in a roundabout way – by helping the bank get those invoices – maybe that will be less money that Arrow owes the bank and more money that’s available to the employees in the bankruptcy.”
In addition to the double-billing, she said months earlier a TAB representative came to Tulsa to sit down with Moore and cold-call customers to verify their account balances.
“Jonathan Moore gave them a list of about 30 customers they could call,” she said. “He told TAB they couldn’t just call any of their customers because you may jeopardize our business with them, so he gave them a list of customers that could be called. They took the phone numbers from the system and called them.”
She said the numbers in the database were most likely changed, “probably to prepaid cell phones where somebody would answer and pretend to be a customer.”
“TAB would ask them if their balance was really $30,000 and the person on the other end would say, that ‘yes, that balance was correct,’ when in truth, their real balance was $3,000 so that’s how the phone calls worked.”
“I am speaking out now because I think people deserve to know the truth,” she said. “I loved my job and I loved the people I worked with, but not for. As far as I am concerned, we were all working to feed Doug Pielsticker’s greed.”
On Jan. 8, TAB filed a lawsuit against former top executives at Arrow Trucking, including Pielsticker and Moore, alleging “fraud and racketeering.” The bank alleges that Arrow Trucking committed bank fraud and wire fraud that cost TAB $12.5 million.
Work not over
for Good Samaritans
While David Alan Turner of Sand Springs, OK, is currently looking for work himself these days since Arrow Trucking’s unexpected shutdown, he’s quietly working behind the scenes to help drivers secure new jobs.
Since early January, Turner, the former director of safety and training for Arrow Trucking, has done employment verifications for more than 300 ex-Arrow drivers.
Turner, who worked at the company for more than 13 years, starting out as a driver and moving up through the ranks, had a master list of all of the drivers who “were current” at the time of the collapse.
“So far, I would say that 95 percent of those that I verified employment for have taken a new job,” Turner told Land Line in late January. “I don’t have their full records, but if they were there at the time Arrow (Trucking) closed, I have their safety background and their actual dates of employment.”
While signs were there that the company was in severe financial trouble, Turner said it came as a surprise.
“I am sure there were warning signs and we all saw things we wondered about and shook our heads about, but again, we were getting reassurances from the highest levels that everything was going to work out,” Turner said.
Leading up to the closure, he said there were problems getting repairs done in a timely manner or paid for in a timely manner.
“Right up until the week before everything happened, we were being told it was just a matter of refinancing or the bank had done some annual audit and everything was a go,” Turner said. “Obviously, that’s not what happened.”
Turner, along with a network of people that included Donna Creekmore, a former driver/manager at Arrow Trucking, worked to verify drivers who were stranded out on the road when the company shut down.
“There were a lot of good people who had contact with the drivers on a daily basis who were staying in contact with the drivers, advising them what to do and how to get them home,” he said.
At the time Arrow Trucking closed, Bill Pelham showed he owed less than $1,000 before his truck was paid for through the company’s lease-purchase program. Even though he thought he had hit rock bottom when he found out he was going to have to refinance his truck for more money than he owed, his situation took a turn for the worse when Arrow Trucking filed Chapter 7.
While Daimler agreed to finance him so he could keep the truck, he was required to turn it in for 10 days so he could get a “repossession title.” During that 10-day period, Pelham, of Phenix City, AL, said that Arrow Trucking filed Chapter 7 bankruptcy. He was told his truck was being held “indefinitely” until everything was sorted out.
“I already had a job lined up and everything so I could start running and making money. Now this happened, and now I am screwed again,” Pelham said.
Over a five-year period, Pelham estimates he spent about $500,000 on fuel and about $145,000 in payments and license fees for his truck. Before the company’s collapse, he had also spent $4,200 on new drive tires. Now, he said he’s stuck “playing the waiting game.”
“It’s a crying shame that this happened and is still happening to us,” he said. “I did have hope that I would get my truck back because that’s a lot of money to lose and have nothing to show for it.”
Creditors are lining up to find out what assets, if any, remain. In court documents Daimler Chrysler Financial Services filed in late January, Arrow Truck Leasing Company – ATLC – of Tulsa, OK, owed them more than $41.5 million for defaulting on their “direct purchase money loan and security agreements by which ATLC financed the purchase of certain trucks and trailers.” That amount includes interest, late fees, costs and attorney fees. Daimler also maintains that ATLC is not maintaining current insurance on the fleet.
Some former Arrow Trucking employees say the company’s failure all boils down to “one man’s greed.”
One ex-Arrow Trucking employee said she had serious concerns regarding the company’s finances in the weeks before the collapse, but she said half-jokingly that as long as her paycheck didn’t bounce she was just going to focus on doing her job.
“But it’s no joke when you have no money and no job. You’ve dedicated yourself to your job, and everything’s taken away from you because someone wasn’t satisfied with just being rich. He (Doug Pielsticker) wanted to be [super] rich,” she said. “We all paid the price.” LL