A federal judge has approved Wells Fargo Bank’s motion to appoint a receiver to protect its assets after Eleets Transportation’s abrupt shutdown in November 2012.
On Wednesday, Jan. 16, U.S. District Court Judge Donald M. Middlebrooks approved Soneet Kapila of Kapila and Co., headquartered in Fort Lauderdale, FL, as the receiver to protect and collect all of Eleets’ assets, including accounts receivable. The bank claims it is owed more than $5.7 million after the trucking company and brokerage defaulted on its $12 million line of credit.
According to court documents, Eleets failed to file an answer to Wells Fargo’s verified complaint, which was due on Jan. 11.
Eleets, headquartered in Jacksonville, FL, owned a brokerage and a trucking company. Its trucking fleet, which once had more than 240 trucks, was down to around 44 trucks at the end. A source working close to the situation says the company drivers were paid. However, those who hauled for Eleets’ brokerage are owed an estimated $8 million.
Some creditors, alleging they are owed thousands, have filed a petition to force Eleets Transportation into involuntary bankruptcy. As of press time, Eleets Transportation had not filed its own bankruptcy petition.
In early January, Eleets’ owner Allen Steele stated in his answer to the involuntary Chapter 7 bankruptcy petition that his now-defunct company “does not have the funds to engage counsel and therefore will not be responding formally to the petition” unless forced by the courts to do so.
According to court documents, the petitioning creditors state that Steele’s letter shouldn’t be considered because it was not filed by an attorney.
Elise M. Rosamonda of Weiss, Spencer and Levin in Lighthouse Point, FL, told Land Line that a law firm has filed a petition on behalf of some of her clients on Dec. 28, 2012, in the U.S. Bankruptcy Court for the Middle District of Florida in Tampa.
“We rarely go this route – placing a company into an involuntary bankruptcy situation – but this is just a unique situation,” Rosamonda said. “We know of so many carriers that were absolutely devastated by them just abruptly shutting their doors.”
She said the move was necessary after Wells Fargo, headquartered in Charlotte, NC, filed an emergency motion for the appointment of a receiver.
Rosamonda said Wells Fargo and some of the carriers are demanding payment for the loads. However, some of the shippers are concerned about who to pay for fear of being placed in a “double-payment situation.”
“We hope to argue on behalf of the actual delivering motor carriers that the freight charges pledged to Wells Fargo were grossly encumbered by the carriers’ freight charges, and Wells Fargo failed to do its due diligence to ensure the accounts receivable are wholly owned by Eleets,” she said.
Copyright © OOIDA