SE Freight Systems Inc. London, ON

Jim L

Jim L

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Mar 2, 2009
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SE Freight Systems Inc. has gone bankrupt. I heard through the grapevine two weeks ago but didn't think too much about it because I dealt with them a few years ago and found them rude and very unprofessional.

Today, AR drops an invoice on my desk saying they can't get a hold of them. Darn....looks like I have to further tune our systems so this doesn't happen again.

Here is the information about their receivership.
http://www.grantthornton.ca/services/reorg/bankruptcy_and_insolvency/SEFreight

I called the shipper today who was unaware of the situation. Lucky for me they have not paid it. I told them to hold all funds. He was surprised I called because someone from SE Logistics (Not SE Freight) called just today asking them to pay the invoices and if they pay today they will take quite a percentage off but it has to be e-transfer. It sounds as if a past employee/owner is trying to cash in invoices. They even sent him invoices but they didn't look anything like the previous invoice. I told him not to pay anyone or risk paying more than once for the invoices.
 
Thats right. Warren Jeffrey. he has many companies, and some operated out of Florida and Oakville. I did not hear about the drub bust though?
 
Would the list of unsecured creditors matter if they were a broker?( if you are the end carrier) Aren't the directors personally responsible for carrier payments, if their business has been paid for the loads? I think you can pursue the shippers and receivers also if their broker has not paid you? Good Luck!
 
If a broker, or any business entity files for bankruptcy, one of those filings is a list of unsecured creditors. In the case of a broker, most of those creditors would be carriers to whom they owe money. If the broker maintained a trust fund, and it was discovered that the owners or principals of the company were using those funds for anything other than paying the carriers, then there could be a case made against them for breaking the conditions of the trust. If any of the outstanding carrier invoices were for either US inbound or outbound shipments, and the broker was licenced to conduct brokerage business in the US, a carrier could make a claim against the broker's surety bond. In spite of these two conditions, it would probably be easier and likely more successful, for the indebted carrier to attempt reimbursement from either the shipper or receiver.
 
You can perform a corporate search to see who the directors are. And sue them. I would also immediately put the shippers and receivers on notice that they are being sued also. Maybe they still owe the carrier money and can withhold amounts.
 
In this case, SE is (was) really a carrier. My guess is that the bulk of the liability is to equipment financing companies and such.
 
Unfortunately, case law is all over the map on this. Rule of thumb now is:

[1] Proof of payment from the broker's customer to the defaulting broker, and
[2] That the individual named in any suit was a "directing mind" of the brokerage company. Directing mind does not necessarily equate to a director. A DM can also be a senior manager. If you want a copy of the "directing mind" trial, e-mail tcrclegal@hotmail.com

A list of unpaid carriers (unsecured creditors) could result in the Receiver having to put monies collected for brokered loads, after the date of receivership, into a separate trust account for the benefit of those unpaid carriers related to the post-receivership collections. This is what happened in the GMAC Federal Industries case where those rights of carriers were confirmed.

Again, if anyone has a list, please let all of us know.
 
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Thank you Scam Chaser. Your knowledge and insight of these matters is appreciated by all.
 
I have to agree with Scam Chaser. Pursue the shipper and receivers ASAP at any rate. They may be holding payments for the broker!
 
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