A Michigan-based trucking company filed for Chapter 11 bankruptcy last week, adding to a growing list of failing trucking companies in the wake of COVID-19.
DIS Transportation LLC and its affiliate company DIS Express Inc. submitted its filing to the Bankruptcy Court for the Western District of Michigan last week.
DIS Transportation reported $393,311 in total assets, including $248,780 in machinery and equipment; along with $568,532 in liabilities, $262,096 of it with unsecured creditors.
The filing shows DIS Transportation had as much as $1.7million in liabilities in 2019, but was able to shrink them down to $568,532 over the course of 2020.
In the bankruptcy filing, DIS Transportation described the financial strain it was put under when per mile freight rates dropped by 50 percent in 2018. The company worked with a consultant to eliminate overhead and reduce liabilities, but was unable to recover.
DIS Transportation grossed nearly $8.5 million in 2018, then $6.5 million in 2019. However, in 2020 DIS Transportation had generated a little less than $1.4 million in revenue as of the filing date.
“DIS was a successful company there for a number of years and in 2018 the freight rates dropped substantially, which really impacted their ability to meet their overhead,” said Steve Bylenga, partner at Chase Bylenga Hulst PLLC, the lawfirm representing DIS Transportation.
“They took affirmative actions over the last couple of years to try to mitigate any issues with it. They brought in a consultant. They were able to reduce about two-thirds of their debt through downsizing and selling unnecessary assets and were trying to get it down to the point where they could meet their day-to-day demands and just weren’t able to do it in time, especially when COVID hit in the spring.”
Bylenga says he expects more businesses to file for bankruptcy in the near future, particularly in the Spring of 2021.
“We are getting a substantial amount of inquiries right now — a lot of people have been holding on for the last six or seven months hoping to get through,” he said.
“Most of those companies are saying we’re almost there, we’ll probably need to file in the near future. That’s why I think you’re going to see a substantial uptick in filings probably in January through March. Traditionally, you don’t see many bankruptcies during the holiday season.”