OOIDA has reached a settlement of a class-action suit filed against Intrenet Inc., a holding company; its four motor carrier subsidiary companies; and Huntington National Bank. The class-action suit was filed in the Bankruptcy Court in Ohio.
Huntington National Bank provided financing for the Intrenet companies and was holding the escrow accounts. Under the terms of the settlement, Huntington Bank will fund a settlement in the amount of $400,000 for disbursement of escrow funds to members of the class. Although Huntington has agreed to fund the settlement, the bank has not admitted any liability to Intrenet drivers.
The class is composed of owner-operators who were entitled to the return of escrow funds at the termination of their agreements with any of the Intrenet carrier companies at the time of the bankruptcy. The cost of class notice, disbursements of escrows, administration of the settlement fund and plaintiff's attorneys' fees also will be paid from the settlement fund. The settlement is subject to approval by the Ohio Bankruptcy Court.
Intrenet Inc. ceased operation on Jan. 2, 2001, and more than 700 owner-operators leased to Roadrunner Distribution, Roadrunner Trucking, Advanced Distribution System and Eck Miller Transportation were terminated as of that date with none of their escrow accounts returned by the companies. Huntington National Bank served Intrenet and its four motor carrier subsidiaries prior to the bankruptcy.
The OOIDA lawsuit was filed as a class action on behalf of all owner-operators under lease to any of the four motor carriers. The case was of particular significance because of the court's ruling concerning the status of escrow accounts. OOIDA sought to separate from the bankruptcy estate the escrow funds held by the defendants at the time of the bankruptcy and return them to individual owner-operators prior to the payment of the amounts due to creditors.
U.S. Bankruptcy Judge J. Vincent Aug Jr. (for the Southern District of Ohio) ruled in OOIDA's favor that escrow funds are subject to a statutory trust created by the federal regulations. He declared such statutory trusts could not be included in Intrenet's bankruptcy estate.
"We are very pleased to reach a settlement in this case," OOIDA President Jim Johnston said. "This case was important in further defining in the courts the rights of owner-operators to those funds held in trust, especially when carriers go into bankruptcy."