Dive Brief:
- Sparhawk Trucking and Sparhawk Truck and Trailer are liquidating assets and shutting down their businesses after failing to find a buyer, according to a Sept. 4 notice.
- The companies filed for Chapter 11 bankruptcy in March in Wisconsin. But now, they determined they must close operations and lay off 74 workers, which includes 42 drivers, according to the notice.
- The companies planned to begin terminating employees on Sept. 8 with the dismissal of seven office and 13 shop employees, according to Chapter 11 Trustee Matthew Brash, who was appointed to the role by the court and noted that all layoffs would be completed in November.
Dive Insight:
Sparhawk and related businesses noted financial turmoil earlier this year, stating that at least $10.1 million was reportedly owed to lender WoodTrust Bank.
The freight recession, equipment issues, a lawsuit involving a railroad company and other problems contributed to the company trying to reorganize its finances.
As a buyer was sought, the company sold off non-core assets. But now, the company is liquidating other assets, such as equipment.
In addition to the layoffs, Sparhaw gave notice to 38 drivers who are independent contractors about the shutdown.
Other carriers have also had been unable to continue their operations this year amid the changing market and business conditions. One of the most recent was TP Freight Lines of Oregon, which suspended service in August, according to the Teamsters. Additional companies have filed for Chapter 7 bankruptcy in states ranging from California to Illinois, Texas and beyond. Unlike Chapter 11, Chapter 7 is typically done to liquidate a business.
