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If Schroder had an Ontario Broker office brokering freight , The carriers owed money can get their funds from Schroder's Carrier trust account they have set up . Correct ?
Schroeder Freight - Bankruptcy
- Thread starter PackRat
- Start date
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Only if Schroder's Logistics Division was one of the very few brokers who maintain a trust account, and only if they were using it properly to segregate the funds received from their customers and due to the carriers, from their general operating account. Both a couple of big, and highly unlikely "ifs". From previous posts, perhaps ScamChaser can chime in on the Trust Account aspect of this case.
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The big problem with the Ontario Freight Brokers license and the regulations is that there was no governing body who made sure that these were being adhered to. The US one is a lot better because the insurance companies post data to it. In the US, if you don't have the bond you can't get prequalified as a supplier for any significant shipper, but here if you ask a TM what the license and bond are chances are they won't even be aware.
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I guess the people who enforce the HTA find it easier to issue a speeding ticket or tail light violation to trucking companies than to peruse individuals/ companies who steal millions from hard working trucking companies ?
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Business failure is not illegal.. it happens and the rest of us sometimes get ourselves caught up in someone elses problems that way. Most of us who have been at this for some time have had to write off money due to nonpayments.
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Every year I question why we pay $3,000 USD for our bond when nobody ever asks for it and I am sure there are at least 50% of the Canadian brokers moving freight in and out of the USA without one. When we inform our customers about it, none of them have a clue it exists and even some of them don't seem to care. I do however continue to renew it as we like to follow the rules and I know that as soon as I let it go, we will for sure have a client or a carrier ask for it.
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At this point, it would appear that the only time having, or not having a trust account is of any importance, is when there is a bankruptcy. Even then, it becomes a matter of the courts interpretation of the "standing" of the trust account as it compares to other creditors. It could be argued that any monies left should be assigned to the trust account (even if they did not have one) and paid out to the carriers involved. Literally speaking, a trust account is as it's name implies, an account that holds funds "in trust" and separate, for the parties who have provided the service. From what I have heard and understand however, is that "secured" creditors have been jumping the queue and taking first shot of any remaining funds. Obviously, complicating the matter is when the bankrupt party has co-mingled the funds, perhaps making it easier for secured creditors to win their argument. Again, Scam Chaser, feel free to offer your insight, as you are much more familiar with these matters than either myself or most of the other members.
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I really think the ease of people opening up corps knowing that they are just going to suck them dry and screw their vendors is just to easy in this country, in all industries. It's really sad when people are so selfish that they don't consider the implications on other businesses and the overall economy just to feed their greed. How is it that someone can also keep doing this time and time again? As I never have nor hope to god I am never in financial trouble where we have to consider bankruptcy, what is the laws as far as claiming in the past and having the ability to open other corps? Also, I am guessing that some open multiple corps prior to claiming and play a shell game? If a corporate officer knowingly buries any of several companies they may have, is there any sort of ramifications towards their other corps? My guess is no...
Many penny stocks publicly traded play this game. Really hard game to prove and more expensive to litigate.
You have to due diligence with giving credit. Even as a broker I've had some people give me credit when I just opened shop and I was amazed how they didn't check that I was in business for only a few months.
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I had the same experience.. but glad some people took a chance on me. If everyone needed a five year track record no new business would ever get off the ground. It's why I will also work with new carriers.. chances are they're not new to the industry anyway.. just new to having their own business.
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I have collected from shippers on several occasions...
I have also had plenty tell me to get lost of course...
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I don't believe that this bankruptcy was fraudulent ... but they were probably not in good shape by the time they started the brokerage and were trying to fix their shortfall on asset by brokering freight and hopefully moving better paying freight on their trucks. But this is not an overnight thing ...
The point of the bond is to make sure that players coming in are capitalized enough. If you are doing business with US based clients, I can tell you that unless they are small-time shippers they are all asking for the bond. But Canadian buyers are not.
The point of the bond is to make sure that players coming in are capitalized enough. If you are doing business with US based clients, I can tell you that unless they are small-time shippers they are all asking for the bond. But Canadian buyers are not.
Jonny C, can you describe what steps you took in going after a shipper? Did you involve lawyers? Seems odd that they would tell you to get lost if they are legally on the hook.
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Why leave it to the Trustee? They are attempting to protect other parties. issue a claim against the shipper and receivers ?
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Hey KeyFactor,
I don't use lawyers, as they are expensive... I do my own research and then use it against my target... haahaha...
Mostly I just send a letter, usually email but I have used paper letters and couriers in some cases... The letter explains the details of exactly what service I provided and what has happened since, including a narrative of my collection attempts... Then I explain the Mercantile Law Amendment act and if in an email, I will provide a link to it... I explain how that law works in simple terms, and what's going to happen if they don't respond...
I follow this up with good ol' fashioned hounding... by phone, fax, email... I've even shown up to people's houses and talked to their neighbours.... whatever it takes...
9 times out of 10, this is enough to get the broker's customer to put the necessary pressure on the broker to pay the us, the carrier...
When it's not enough, I go ahead and file in small claims court... I have done this less than 10 times...
Most of those I have sued in this way have relented before the court date comes and they pay what is owed...
Only in one case so far have I had to actually go to court in a case involving unpaid freight bills... This was a special case, because the broker and their customer were also claiming we damaged their cargo, and refusing to pay us as a result...
Excellent work and thanks for the details. I still think it's odd for them to tell you to take a hike...maybe they don't know transport law.