Two Pennsylvania-based trucking companies, which contract with the U.S. Postal Service to haul mail, have filed for Chapter 11 bankruptcy.
McClellan Trucking Inc. filed its petition in the U.S. Bankruptcy Court for the Western District of Pennsylvania on Wednesday, five days after the company’s parent company, Duran Transfer Inc., filed for bankruptcy protection on Sept. 23. The petitions state both companies are based at the same address in Waterford, Pennsylvania.
According to court documents, Duran Transfer and McClellan both filed a motion for joint administration of affiliated Chapter 11 cases on Wednesday. Blaine Duran, president and owner of Duran Transfer and McClellan, signed both petitions.
The companies have been in business for more than 30 years and employ 23 people. According to the Federal Motor Carrier Safety Administration’s SAFER database, the trucking companies both list having nine power units and 21 drivers. However, Duran Transfer and McClellan operate under two Department of Transportation numbers.
Besides hauling mail for the Postal Service, Duran Transfer hauls general freight, household goods and building materials, among other cargo. Its trucks were inspected 11 times and one was placed out of service over a two-year period, resulting in a 9.1% out-of-service (OSS) rate, which is well below the national average OSS rate of 21.6%.
McClellan exclusively hauls mail. Its trucks were inspected five times and two were placed out of service in the same two-year period, resulting in a 40% OSS rate. According to FMCSA data, McClellan’s common authority was revoked on May 9 but was reinstated on May 16.
In court filings, Guy F. Fustine, attorney for both companies, said there are two secured creditors in the Chapter 11 bankruptcy. The Pennsylvania Department of Revenue filed a judgment against McClellan for over $4,000 in August 2021.
“The judgment is believed to be cross-collateralized by a tax assessment lien against debtor’s property, including cash collateral,” Fustine stated in the filing.
As of publication, Fustine had not responded to Freightwaves’ request seeking comment.
Citizens Bank of Pennsylvania filed a UCC-1 financing statement with the Pennsylvania Department of State in May 2013 for nearly $24,200.
The filings list the companies’ assets and liabilities as between $100,000 and $500,000. Both petitions state they have up to 49 creditors and maintain that funds will be available for distribution to unsecured creditors once it pays administrative fees.
Penske Truck Leasing is listed as an unsecured creditor on both petitions, owed nearly $16,300, while the trucking companies owe Citizens Bank of Rhode Island nearly $59,000. McClellan owes the Internal Revenue Service more than $29,000, while Duran Transfer owes $34,000 to the IRS for taxes, according to the petitions.
Uptick of bankruptcies among Postal Service mail contractors?
Two other trucking companies that haul mail for the Postal Service have filed for bankruptcy since May.
Family-owned Matheson Postal Services Inc. of Sacramento, California, filed its Chapter 11 petition in the U.S. Bankruptcy Court for the Eastern District of California on May 5. Matheson, which has 248 trucks and 383 drivers, seeks to reorganize.
The company’s terminal handling services division, Matheson Flight Extenders, also filed for bankruptcy protection on the same day.
Family-owned Rooney Trucking Inc. of Polo, Missouri, which also contracted with the Postal Service to haul mail, ceased operations and filed Chapter 7 bankruptcy in early May.
The 67-year-old trucking company had 37 drivers and 66 power units, according to the FMCSA SAFER website.
Attorney Ryan Blay told FreightWaves that “fuel and labor expenses were certainly issues that affected Rooney Trucking Inc.”
“The bigger issue, though, was the decision by the U.S. Postal Service to take away some routes and cancel certain contracts,” Blay said. “The business couldn’t function profitably with a restricted income stream. This was the biggest factor in deciding to declare bankruptcy for the company.”
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