Mackinnon Transport Inc Guelph

Dave

Good to hear that you have a good lawyer, sad to hear that you need one.

Please let us know the hourly rate charged and their experience with the trust account issue.

I myself took a class specializing in transportation law a few years ago @ McGill. It was informative , although there was quite a lean towards Rail, due to the lecturers specialization.
Trucking is clearly lacking cohesive representation, it does look like everyone is out for themselves.
I believe this is more out of necessity than anything else!

I am not so sure that the bull headed approach to being a small carrier still applies, those that have made it this far through the last and present recession are pretty well informed.

The best of luck in your efforts!!
 
As mentioned previously, we challenged Longbow in court on the funds that should have been held in a trust account and lost. We did not go to the expense of hiring a lawyer as it was a small amount, we were concerned about the principle of it. Anyway 'the court declared that the funds held by the trustee as received from the Bankrupt's bank and from collection of the Bankrupts account receivable are not trust funds and are not subject to the statutory trust established by section 191.01(3) of the Highway Traffic Act, RSO 1990 c H.8, as amended '

Basically as they had never established or worked with a segragated trust it had never existed and was therefore not an issue to be considered in disposition of bankruptcy funds.
Good luck, I hope you have better results than we did. It isn't right.
 
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Allfreight

From your earlier comment one can surmise the following:

In the province of Ontario, although legislation states that a legal entity selling freight must use a trust account to do so, if one has not been set up and used prior to the implication of a trustee, it's just to bad for the carriers that had performed the work.

I firmly believe, that a higher court would have not seen things the same way.
Otherwise, all carriers have been mislead by the province of Ontario into believing that, the legislation they had enacted to protect Carrier funds was beneficial!!!

As carriers we must unite and make sure that the legislation that is out there is enforceable and has some teeth to it!
 
I'm really sorry to read this thread - yet at the same time I'm almost elated.

I've been saying for years that Bradley has been/was nothing but a puppet in the hands of the largest carriers (Laidlaw etc) up his behind moving his mouth to their words.

Many years ago myself and others in the gravel industry went to Bradley to ask for help. We were shown the door.

When we had major media attention, the media went to him for comment and he came across as if he was actively involved and searching for a solution.

My take of the problems in Canada with trucking is that it takes too long to pay the trucks. Would the American system work better here? Who knows - but at least you would be looking at losing a maximum of 14 days of money - not the 30-60-90-120- that some are fond of doing. Those with the biggest credit lines and bankrolls can simply outlast those who need the money first.

Will there will be solidarity in your new organization...who knows? If the biggest are feeling threatened and insecure about their plumb situations - they just simply buy up those that make the most noise.

I hope this gathers momentum and yes re-regulation comes into effect to protect those that cannot afford to pay for protection.

Nick
PS

Better put a little something in the budget for a lobbyist.
 
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Why would any carrier do a load for anyone before "FIRST CONFIRMING" they have a TRUST ACCOUNT! I educate my customers that get calls everyday to confirm that the Brokers looking to do work have a TRUST ACCOUNT. If carriers and customers did not deal with un-credible brokers without trust accounts they would not be able to opperate!
 
Truck finder

May I suggest the following scenario:

I am set up a trucking company/ freight brokerage with the intent of selling freight to carriers.

I comply with Ontario regulations and open a trust account, I also open a current account for day to day operations.

I do the minimum possible with the trust account and run 95% of business through the current account.

According to the judges opinion in a previous comment ; if the monies were not placed in trust account it is just tough luck for the carrier.

The question now becomes , how does one regulates that?

This is what needs to be worked out . Making sure that penalties for miss use are severe enough to detract, or in cases whre that is not enough, that lifting of the corporate vale be allowed in cases of clear abuse ( even if fraud is not proven).
 
There is case law that you can get and one good one is Canadian Imperial Bank of Commerce vs Nadiscorp Logistics Group Inc. there is also another one GMAC Commerical Credit Corp - Canada vs TCT Logistics Inc. Both are where there was no trust accounts and how the receivership has handled this.

You can pm me and I will send them to you.
 
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Forget the trust account and go to the root of the problem...which is slow paying shippers. If shippers paid their bills on time then brokers too would be able to pay on time. It's really that simple. Brokers get themselves into trouble by extending credit to deadbeat shippers. The brokers then run into trouble with paying their carriers on time.

Why do so many carriers treat the shipper as the innocent gentle virgin and the broker as a wolf in sheep's clothing? It just ain't always or even usually that way. Instead of a trust account and a little bond that we all agree is virtually useless, why not tighten up the rules for everyone? Maybe trust accounts for brokers AND shippers is the answer..
 
Every business that provides a service or sells a product is faced with the same problem - slow paying customers. Transportation is no more unique than plumbing or taxidermy. Go to any gathering of business owners and you'll hear the same lament about slow payers. There is no "silver bullet" to alleviate this problem, nor any government agency to come to the rescue. The answer is to have uncompromising payment terms and an in depth, vigorous examination of any potential new client. Sure, you will have to pass on a few, but the cost involved in carrying 60 day+ receivables can push an otherwise solid company over the edge. There are too many examples to choose from where this exact scenario has transpired.
 
Agreed, and too often its our own fault for not following up promptly with collections. This is why 15 day payment terms really means 30 days, and bills that are due in 30 days are ok to pay in 45 or 60. I have found that clearly spelling out terms and the importance of keeping to those terms right from the get go is paramount to ensuring timely payment. I state it right up front...I need to have payment in hand within 30 days of invoice mail date, no exceptions. It has cost be some business over the years, but the way I look at it...I would prefer having fewer customers and lower sales to a lot of customers who need to be chased for payment.
 
I don't think that this was necessarily Mackinnon's demise, but in the case of failed brokerages in particular it usually is about poor capitalization. Brokerages that have been around for a while generally have built up cash reserves to get them through a good 2-3 months with little or no cash inflow, and with good AR management, after being established for a couple of years you can get LOC to cover AR if you need it.

That said, Mackinnon's management of billing was always atrocious.
 
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IMO, we can look inward, and blame ourselves but that is only a small part of the problem. If I cut everybody off at 30 days, I would have no Canadian customers, including some of you on here.
MacKinnon is paying for bad business decisions with their vendor's money. Can we blame the 10 pages of unsecured creditors? Sure. Can we blame the IH dealer and the tire company who are owed 338000 combined? Sure.
The ones to blame are the MacKinnon execs. They learned a lot from the Walker deal, and thought "what the heck, lets do it again". Do you think they went this route because their customers are slow paying? Bullshit. They went this way because they can.
The docs are in my lawyers hands now, they are experienced enough to go the trust account route if it works. Stay tuned.
 
Keep us posted please, they got us for $80,000 dollars. We have insurance to cover $50,000 of it but the rest we are S.O.L. - so we are being told.
 
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Hi Loaded Miles: I found your insurance comment interesting...where does one get a policy under insurance to cover a potential situation like this one? Thank you.
 
It's A/R insurance. It protects you against stuff like this and your banker likes it because your A/R is guaranteed.
 
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Yes...businesses can insure their receivables - especially on a new or existing customer with high receivables owing or potentially owing.

If anything happens to this customer and/or they go bankrupt - you are covered....

Not many people are aware of this type of insurance coverage - but it does in fact exist...
 
We use edc. They are pricey but with the characters in this business its better to pay alittle more to be secure. We have been using it for 4 or 5 years. They have to approve the customer as a low to high risk but u know who u are dealing with b4 u get a huge a/r built up
 
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