Two Canadian cross-border trucking companies have been forced into court-ordered receivership at the request of their lender under the country’s Bankruptcy and Solvency Act, court documents show.
Deloitte Restructuring assumed control over Kings Cargo Express and Canada Cargo Lines, based at the same address in Winnipeg, Manitoba, on Oct. 5 following a decision by a judge of the Court of Queen’s Bench. They collectively owe CA$2.2 million (US$1.7 million) to Toronto-Dominion Bank (TSE:TD), according to a report filed by Deloitte on Friday.
Deloitte plans to collect CA3.3 million in accounts receivable and sell the companies’ property, valued at almost CA$1.3 million, according to the receiver’s report.
The carriers provide long-haul truckload and less-than-truckload services, both cross-border to the U.S. and within Canada. They have a combined fleet of 27 trucks authorized for operation in the U.S., according to the Department of Transportation records.
It was not clear from the court filings what led to the receivership. The CEO of Kings Cargo Express, a guarantor for both carriers, and a lawyer for TD did not respond to FreightWaves’ requests for comment.
Few Canadian trucking failures during pandemic
Canada has yet to see a large wave of trucking failures despite considerable pressures related to the COVID-19 pandemic and the uneven recovery in freight. The Canadian government has spent billions of dollars to shore up companies during the pandemic, including those in the trucking industry.
The cornerstone of Canadian government support has been the Canada Emergency Wage Subsidy (CEWS), which covers up to 75% of a salary at qualifying companies. Prime Minister Justin Trudeau recently announced it will extend to next year.