February 10, 2021
Before the pandemic, the trucking industry faced rising costs, evolving compliance mandates and multiple other challenges. Many fleets struggled; some filed for bankruptcy — according to Broughton Capital, 640 of them in the first half of 2019.
Then, along came COVID-19, and many of the smaller trucking companies couldn’t pivot as fast as the larger ones, to meet the demand for essential goods.
They didn’t have the right equipment, enough trucks, good contacts. So, they lost out, and many went out of business in 2020. What would have happened if these smaller trucking fleets had instead filed for Chapter 11 bankruptcy?
It depends, said Zev Shechtman, a partner at Danning, Gill, Israel & Krasnoff. “What happens hinges on how the company is situated — if it’s still allowed to operate, has the cash to operate and how deep in the hole the fleet is,” Shechtman said.
To read more insights from Zev in this article, click on the link here.