Carriers unable to pay drivers, buy fuel after CoreFund Capital closes

Freightwaves ^ | 7/28/22 | Clarrisa Hawes

[Roman_War_Criminal]

Hundreds of small-business truckers who use CoreFund Capital to factor their accounts receivable are struggling to stay afloat after the Weatherford, Texas-based company abruptly closed its doors 10 days ago and fired its entire staff over a legal spat between two brothers.

However, late Thursday, Parker County, Texas, District Judge Graham Quisenberry appointed a receiver on behalf of CoreFund, which may help truckers gain access to funds more quickly.

Attorneys, rival factoring companies and brokerages have received numerous calls from some of CoreFund’s approximately 350 trucking clients, including many owner-operators, who are desperate for answers and may be forced to close their doors if they can’t pay their drivers or purchase fuel.

Tony Ginevra, director of operations for Florida-based John J. Jerue Truck Broker, works with a network of 50,000 trucking companies, including 140 carriers in his database that factor their receivables through CoreFund Capital. He’s concerned about not being able to pay these carriers since he’s had no communication with any of CoreFund’s executives.

[Roman_War_Criminal]

[DoodleBob]

I know many people want to see the bogeyman and Klaus Schwab everywhere.

However, this calamity is about the family owners potentially engaging in a fraudulent conveyance of stock ownership, and the court throwing the firm into bankruptcy to sort out the mess.

In that process, family owners opted to have the firm go dark vs operate with DIP financing or under receivership.

The receiver is now trying to get the factor (which advances money owed to truckers asap and thus improving cash flow, rather than waiting for customers to pay, by buying the IOUs) back up and running. Truckers are worried lightning could strike again, and want to leave the factor. However, there is a tangled web of liens and releases that have to happen, otherwise the new factor may not get paid via the IOUs.

This is a small business workout situation, and there are thousands that happen annually. This isn't a Soros or Deep State calamity.

[GingisK]

I have been in a situation where I had to factor receivables in order to stay in business. Those loan sharks are the kiss of death. Once you reach that condition, you will fail. You are better off to declare bankruptcy and retain a little something.