Kal Freight Restructures with Confidence, No Layoffs Expected, Says Co-founder
Kal Freight, a significant player in the trucking industry, has taken a strategic step towards restructuring under Chapter 11 bankruptcy, ensuring its operations continue smoothly. Co-founder MP Singh reassures stakeholders, emphasizing that no layoffs are expected, highlighting a commitment to their workforce amidst these changes.
Kal Freight recently made headlines after filing for Chapter 11 bankruptcy in the Southern District of Texas. This move is designed to facilitate a comprehensive reorganization, allowing the company to stabilize its financials while maintaining operations as usual.
MP Singh shared with FreightWaves that the restructuring is part of a larger strategy and assured that job security remains intact for their 600 drivers. According to the Federal Motor Carrier Safety Administration, Kal Freight boasts a robust fleet with 580 power units, underscoring its substantial market presence.
Reflecting on past growth, Singh noted the company's rapid expansion was fueled by a surge in demand during the 2020 pandemic. "I think we did so much of overexpansion, and we lost money in the new ventures of ours and tires and everything, but Kal Freight was always making the money," Singh candidly stated. This introspective awareness forms the basis for the company's current focus on its core operations.
Pulling Back to Move Forward
The company plans to streamline its operations by divesting from non-core ventures such as KVL Tires, along with various distributions including aircraft and truck parts. Kal Freight aims to liquidate certain assets, including parts, tires, and personal real estate holdings to reinforce its financial standing.
"Of the 600 drivers, no one is worried," Singh confidently expressed. He mentioned open communication with employees well before initiating the restructuring process, a testament to Kal Freight's commitment to transparency and employee morale.
With a remarkable 94% annual retention rate of its drivers, Kal Freight stands firm in its commitment to employee stability and satisfaction. This reflects positively on its internal culture and operational ethos.
Navigating Financial Waters with Assurance
Singh is confident that all creditors will be compensated without disruption. The bankruptcy filings detail that Kal Freight faces obligations to 50-99 creditors, with total unsecured claims amounting to at least $24 million. The largest creditors include significant entities in professional services, inventory supply, and litigation.
Notable creditors like CIMC Reefer Trailer Inc., owed over $12 million, and Continental Tire, with claims exceeding $1 million, are highlighted in the court filings. Singh's assurance of managing these obligations is pivotal for stakeholder confidence as the company navigates this financial transformation.
Founded in 2014, Kal Freight has established a resilient operations network across multiple states, including California, Texas, and New Jersey. This strategic presence underlines its substantial impact on the logistics landscape.
For those interested in exploring more about Kal Freight’s services and updates, visit our Shop, Register, or access the Help Center.