The U.S. Bankruptcy Court for the Middle District of Florida approved the $2.3 million sale of IPS Worldwide’s remaining assets to Europe Management SPRL.
An Ormond Beach, Fla.-based third-party freight payment and audit services provider, which filed for bankruptcy early this year, will turn over its assets to a Belgian firm.
The U.S. Bankruptcy Court for the Middle District of Florida approved the $2.3 million sale of IPS Worldwide’s remaining assets to Europe Management SPRL on June 25.
“I am surprised that there were any assets of interest left for anyone to purchase,” said Albert Saphir, principal of ABS Consulting, who has observed the IPS bankruptcy case. “Possibly it was the technology platform — I don’t think the client list would be worth much after what happened to them.”
According to the initial Chapter 11 filing, which was filed with the U.S. Bankruptcy Court in late January, more than $121 million was owed to IPS’ 20 largest customers, including $41.64 million to Stanley, $28.78 million to Alcoa and $16.96 million to Arconic. These companies advanced the money to IPS to pay their freight transportation bills.
IPS was started in 1998 by William Davies, who served as president. The company claimed at the time of the bankruptcy filing that it processed more than 35 million freight invoices valued at more than $8 billion a year.
However, IPS claimed in its bankruptcy filing to have less than $50,000 in business assets.
This wasn’t the first time a major freight payment company allegedly had defrauded American shippers. In 2013, TransVantage and Trendset were hit by lawsuits from shippers who claimed the companies failed to use their advanced funds to pay carrier bills.
Saphir advises his shipping industry clients to exercise due diligence when handing over their freight bill payments to third parties to avoid becoming victim of companies like IPS.