Executives at Integrated Freight Corp. of Sarasota, FL, were confident that the company they bought nearly a year ago would reopen in early 2012. It appears, though, that the $3.4 million refinancing deal wasn’t enough to save Cross Creek Trucking.
Former Integrated Freight CEO Paul Henley confirmed on March 15 to Land Line via email that he has “resigned his positions with IFCR and affiliates” and to direct future questions to IFCR. Henley has also resigned his position as chairman of the board of directors for Integrated Freight, effective March 8, but will continue to serve as a director.
In Integrated Freight’s latest U.S. Securities and Exchange Commission filing dated March 9, the report stated that “the assets we acquired in the purchase of Cross Creek Trucking Inc., which secured obligations of Cross Creek, have been foreclosed upon and recovered by the respective Cross Creek creditors.”
The executive offices of Integrated Freight in Sarasota, FL, have also been closed.
“We have surrendered possession of our computer servers and peripheral equipment to our vendor. … We have substantial unpaid obligations,” the Integrated Freight filing stated.
In the past few years, Integrated Freight acquired four trucking companies, two of which – Triple C Transport in Doniphan, NE, and Cross Creek Trucking – are now defunct.
IFC owns two companies that are still operating: Morris Transportation Inc., in Hamburg, AR, and Smith Systems Transportation in Scottsbluff, NE. The chief operating officers of both trucking companies, T. Mark Morris and Monte E. Smith, remain on the board of directors for Integrated Freight.
However, in its SEC filing, Integrated Freight reported it anticipates that Smith Systems will be named as a defendant in a lawsuit “by a customer related to a hazardous waste spill in Sacramento, CA.”
The customer has already paid approximately $850,000 of the cleanup costs, estimated to be more than $1 million, according to the filing.
“The customer, who accounted for nearly one-third of Smith Systems’ business, has terminated its relationship with Smith Systems, and is withholding payment in the approximate amount of $350,000 as a claimed offset against its claims against Smith Systems.”
Two independent directors of Integrated Freight, John E. Bagalay and Kimberly K. Bors, have both resigned their positions in recent weeks.
In mid-December 2011, Cross Creek ceased operations after some drivers were stranded without fuel, while others were directed back to the company’s headquarters in Medford, OR, to turn in their equipment because of financial problems.
Cross Creek’s operating authority was involuntarily revoked by the Federal Motor Carrier Safety Administration after the company failed to carry the necessary $750,000 insurance policy.
An Integrated Freight official told Land Line in mid-January that the company would reopen with just a few trucks operating, which didn’t happen.
Morris Transportation and Smith Systems were Integrated Freight’s sole source of revenue for the fiscal third quarter that ended Dec. 31, 2011.
“Other than Morris Transportation and Smith Systems Transportation, we are in default in payment of most, if not all, of our financial obligations,” according to the March 2012 SEC filing.
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