Sparhawk Trucking employees could face mass layoffs amid bankruptcy proceedings, the company's trustee said in a May 28 notice.
The company is seeking a buyer but also continuing operations after filing for Chapter 11 bankruptcy in March.
Nevertheless, there’s no guarantee a buyer will be found or that a new owner would keep all of the existing workforce, according to the notice.
"No employee should count on the business remaining open or mass layoffs not taking place," Matthew Brash, the company's Chapter 11 trustee and senior managing director at Newpoint Advisors, said in the notice.
The notice was required as part of federal and state laws mandating employers alert workers of potential mass layoffs at least 60 days in advance.
“It is impossible for us to determine at present which employees may be affected, if any,” the notice said.
The bankruptcy is affecting Sparhawk Trucking, along with related entities such as Sparhawk LLC. Owner Mark Sparhawk previously said the company's financial troubles came as a lawsuit, asset mismanagement during his medical leave and equipment failures converged while the trucking was already undergoing a freight recession.
Since then, the bank has been selling off non-core assets to pay off creditors.
As part of the bankruptcy proceeding, Sparhawk arranged for CB Leasing of Iowa to buy 50 trailers for $950,000 that were not needed for continuing operations, according to a court filing. Sixty percent of the money is slated to pay creditor WoodTrust Bank, the filing said.
