Stephanie Lieb was quoted in a December 27, 2023 article in Commercial Carrier Journal discussing the state of bankruptcy filings in the trucking industry in light of the sector’s continued uptick in cases amid continued financial distress.
Trucking and logistic companies have faced a myriad of economic challenges in its attempts to recover from the pandemic, including increased wages caused by employee shortages, rising fuel costs and inflation, Federal Reserve decisions to raise interest rates and consumer spending shifts to service-related purchases over freight-transported goods.
“When you have all these problems, and then they all happen at the same time, and you’re already in a business that has a thinner margin, it just becomes a recipe for bankruptcy,” Lieb said.
Lieb added that she has especially seen an increase in bankruptcies among smaller trucking operations because, in large part, of the availability of Subchapter V filings enacted by the Small Business Reorganization Act in the fall of 2019. In light of the pandemic and the CARES Act, Congress bumped up the debt limit to $7.5 million or less and allowed for a more streamlined and affordable process for smaller companies to file under Chapter 11.
“Trucking cases don’t typically have a high success rate within bankruptcy; they usually wind up in a liquidation versus a restructuring, and perhaps filing for this small business Subchapter V, they’ll have a better chance of success,” Lieb said. “It’s hard to say because it’s so new.”
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