H5 transport, a North Dakota-based truckload and LTL carrier, has filed for bankruptcy protection under chapter 11 of the Federal Bankruptcy Code.
It continues to operate, according to the court documents filed with the U.S. Bankruptcy Court for North Dakota.
According to the company’s data available through the Federal Motor Carrier Safety Administration, H5 is a relatively small carrier. Its record lists 10 power units and three drivers. Its headquarters is in Oakes, North Dakota.
In a document filed with the court by Christianna Cathcart of The Dakota Bankruptcy Firm, the attorney representing H5, she described the company as “a small, owner-operated trucking company that relies on independent contractor drivers who are paid weekly for the prior week’s miles.” That statement was made in a request to the court to allow a factoring agreement with Advance Business Capital, a unit of Triumph Business Capital (NASDAQ: TFIN), to continue.
The letter is blunt about what factoring means to H5, a situation that is likely to be found at other small trucking companies trying to survive in the current weak freight market.
“The cash required to pay drivers, fuel vendors, insurance premiums, and taxes does not generate itself,” the letter from Cathcart says. “Just as trucks do not dispatch themselves, receivables do not convert into usable funds without a functioning system in place.”
That system, she adds, is its factoring agreement with Triumph Financial subsidiary, the attorney adds.
Forty nine creditors listed
The bankruptcy filing lists one to 49 creditors, estimated assets of $100,001 to $500,000, and estimated liabilities of $1,000,001 to $10 million.
The actual list of creditors filed with the court totals 24. It includes Triumph Business Capital and Advanced Business Capital, the U.S. Small Business Administration and technology provider Motive Technologies.
The company’s website says H5 was founded in 2018 by Army veteran Lonnie Helgerson. Besides the headquarters in North Dakota, it has a satellite office in Bradenton, Florida.
H5, according to the website, has contracts with 3M Co, Bayer Crop Services, Whirlpool “and many others.” It says it has dedicated lanes between North Dakota and South Dakota and the Illinois/Indiana region.
H5’s Out of Service out of service (OOS) data shows it to have a slightly higher OOS rate than the national average as of the end of August. But the numbers are small: 12 inspections in the prior 23 months resulted in 4 OOS notices, for a 33.3% rate, versus a national rate of 22.3%. Its driver OOS rate was 6.7% compared to a national rate of 6.67%.
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