© Ilia Burdun


US Logistics Solutions, formerly known as Forward Air Solutions, has filed for Chapter 7 bankruptcy, with the loss of a significant number of jobs.

US Logistics Solutions had 870 direct employees, 62 independent contract drivers and 322 laborers contracted through third-party agencies. All have received their last paycheck, according to PE owner Ten Oaks.

According to the filing, the company has between 1,000 and 5,000 creditors and estimated liabilities of between $100m and $500m. Estimated assets are between $50m and $100m.

Former staff said on social media that they were told via text and calls on Thursday that private equity owner Ten Oaks Group had decided to cease operations. Ten Oaks said that the third-party lender “refused to move forward with financial support for US Logistics Solutions, leaving no choice but a Chapter 7 bankruptcy plan”. It also said the company was “in turmoil” prior to 2021.

US Logistics is thought to have lost several large contracts, which are the focus of a court case against its former CEO.

Ten Oaks Group acquired Forward Air’s pool distribution unit in 2021 for $20m, renamed it US Logistics Solutions, and moved it from Tennessee to Humble, Texas.

Not everyone agreed with the decision to shutter the business, which had already seen several bouts of job culls. Eric Culberson, who was promoted from chief operating officer to president in February this year, noted on LinkedIn this weekend: “Due to the abrupt decision by our private ownership group to close our doors at the same time business was surging, I am completely devastated and heartbroken for the 2,000-plus professionals I’ve had the pleasure of working with.

“The timing of this closure did not give me the chance to thank my team for their commitment and support to our customers and to each other. I’m proud of the team we assembled across the country and the countless hours of dedication to our customers.”

While a Chapter 11 bankruptcy gives companies time and space to reorganise the business and continue trading, Chapter 7 is also called a liquidation bankruptcy. Companies must sell non-exempt possessions and assets to repay creditors. Often used as a last resort, it may be the only option for companies struggling with debt.

Mr Culberson appealed to the market to consider hiring those that lost their jobs, and may not receive their last pay cheque.

“If there are any employers out there looking for some outstanding talent within the industry, please consider my former teammates at US Logistics Solutions (formerly Forward Air Solutions). These are some of the most dedicated professionals I’ve had the pleasure of working with in my career and my heart hurts for them right now.

“We all deserved better, and I’m confident that everyone will be blessed with another opportunity to showcase the excellence we strived for everyday,” he wrote.

Staff may be able to take legal action, as has been the case with other sudden redundancies including at Flexport. Under the WARN Act, employers with more than 100 staff must notify workers 60 days in advance of a mass lay-off. This does not appear to have been done.

A source told FreightWaves that it had struggled to obtain more financing from its lenders, forcing it to close the company.

Former staff noted on social media that “freight is just sitting in the warehouse collecting dust”.

Another former employee noted: “Too much overpaid management and admin for the size of the company. They never made a profit under Forward Air, and Ten Oaks didn’t know shit about logistics.”

Another suggested that US Logistics Solutions had lost too many large contracts, including Bath & Body Works.

US Logistics Solutions lost its $30m contract with Bath & Body Works after its CEO, Roger Gellis took up the position of president at rival Pathmark in 2021, according to a lawsuit filed by US Logistics in January. The lawsuit claims that despite signing non-disclosure, non-compete and non-solicit agreements, Mr Gellis shared information with Pathmark.

The lawsuit claimed that Mr Gellis then targeted US Logistics customers and “told them false claims about US Logistics financial state and ability to meet contractual obligations”, including that it may go into bankruptcy. “One of the principal targets … was one of US Logistics largest customers, Bath & Body Works.”

It was not the only one. In December, US Logistics was told by customer Barnes & Noble that it had heard the logistics company was to declare bankruptcy. Several other US Logistics employees also left to work for Pathmark. They have been named in the court case.

Ten Oaks said in a statement: “We are deeply disappointed by the lender’s sudden decision to cease further funding for US Logistics Solutions, which left the company no time to provide advanced notice to employees or properly wind-down operations. Despite the unwavering commitment of the company’s leadership team and workforce to navigate challenging market conditions and improve financial health, the ongoing turbulence in the trucking and logistics industry proved insurmountable.

“We profoundly regret the impact of this abrupt decision on the company’s employees, customers, and vendors. We also sincerely appreciate the hard work and dedication of each of the company’s 870 employees and 62 independent contract drivers.”

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