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PPP loan can’t save Alabama carrier from bankruptcy

The trucking company doesn't plan to reorganize.

Foster Freights LLC of Clayton, Alabama, recently filed for Chapter 7 bankruptcy protection. Photo: Jim Allen/FreightWaves

An Alabama-based carrier recently filed for Chapter 7 bankruptcy, despite receiving a loan to stay afloat during the COVID-19 pandemic through the U.S. Small Business Administration’s Paycheck Protection Program (PPP).

In its filing with the U.S. Bankruptcy Court for the Middle District of Alabama, Foster Freights LLC of Clayton, Alabama, lists its assets as up to $50,000 and its liabilities as between $100,000 and $500,000. It lists up to 49 creditors. The carrier states that no funds will be available once administrative expenses are paid. 

Adam F. Evans is listed as a member of the limited liability corporation in Foster Freights’ Chapter 7 filing. He did not return FreightWaves’ request for comment.

The trucking company’s largest creditor is 22nd State Bank of Eufaula, Alabama. Foster Freights owes the bank more than $131,000 for loans for a 2017 Freightliner Cascadia and a 1997 Peterbilt 379.

According to Foster Freights’ bankruptcy petition, it received a PPP loan for nearly $19,000 on May 4 through SBA lender BBVA USA, headquartered in Birmingham, Alabama.

The carrier, which hauled general and refrigerated freight, has four power units and six drivers, according to the Federal Motor Carrier Safety Administration (FMCSA) SAFER website. Foster Freights’ insurance is scheduled to be canceled on Aug. 4, according to FMCSA data.

Forgivable loans through the PPP started out with $350 billion in the CARES Act, signed into law by President Donald Trump in late March and replenished in April with an additional $320 billion

Read more articles by FreightWaves’ Clarissa Hawes.

See related articles:

Carrier ties bankruptcy to soaring insurance rates, fatal crash
Legal woes force Illinois carrier to file for bankruptcy protection
Legal woes force Florida carrier to file for bankruptcy protection

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  1. Nonya Bizniz

    Pay themselves big wages and cut the rates to the drivers so the owners and CEOs can live the rich man life style. The drivers are the ones that I have pity for. Now they are out of work and 4 weeks out till a paycheck. Can’t even get unemployment cause the company is bankrupt. Tighter regs on brokers and fly by night companies. Get rid of ELDs and DOT.

  2. Jim Stipan

    Its sad to see anyone in a position like this! (2) or (200) trucks, the company owing the money is struggling right now. I’ll keep them in my prayers.

  3. Curious

    I have to agree with the first comment, This happens every day with small businesses. It would be different if they hd 10-15 and were in a small town. Your talking a 1.5-2 millon dollar income to the community.

  4. Matthew williams

    Actually, it is very news worthy!! Small carriers have a rough time competing for freight with the larger ones because many shippers only want carriers that can handle large volume. As such they get to charge more money leaving the smaller carriers with less revenue and the same or higher operating cost per unit. In other words… Drivers want the same benefits, pay rates, home time, etc as with the larger companies only the smaller ones cant compete.. I would say.. do some homework and/or gain some experience before you make a statement that you know nothing about..

    1. Chris Carey

      A large part of the problem for small carriers is not having lanes in place to cover a one way opportunity with decent return freight. Consequently, they are left turning to the load boards or broker relationships in a market with too much capacity and depressingly low rates. Unless you have a really well priced direct relationship with a shipper, the all in returns can turn negative. The only offset is to find other value added services that can augment and support an higher price and margin.

  5. JP

    4 truck carrier, just a drop in the bucket
    Not even news worthy.

    FW you folks struggling with decent articles since COVID-19 work from home started in March.
    LOL you slackers… getting paid $2,000 weekly to watch TV.

Comments are closed.

Clarissa Hawes

Clarissa has covered all aspects of the trucking industry for 14 years. She is an award-winning journalist known for her investigative and business reporting. Before joining FreightWaves, she wrote for Land Line Magazine and If you have a news tip or story idea, send her an email to [email protected].