The Chapter 11 bankruptcy proceedings of trucking company Wyotrans, doing business as National Freight Carriers, took a difficult turn after two of its largest secured creditors claimed they had not been paid for two months for rented or rented equipment used to transport freight and that the carrier is also in arrears with payment of insurance premiums.
Besides its bankruptcy woes, the two men involved in the day-to-day operations of Arizona-based Wyotrans, David Allen and Jeremy Louder, have ties to at least three other trucking companies formed through various LLCs in the last five years. years.
U.S. Bankruptcy Judge Daniel P. Collins scheduled a hearing on Wednesday after Wyotrans’ insurance company, IPFS Corp., owed him nearly $84,000 for his monthly post-petition payments for July and August.
In its petition, IPFS seeks “permission to cancel certain insurance policies and to collect all unearned premiums” due to the insurance company.
In court filings, Penske says Wyotrans leases about 26 trucks and trailers and owes it more than $560,000 in post-petition costs.
In its petition, Penske says Wyotrans stopped paying the leasing company’s fees on August 1, while continuing to use and own its equipment “in the course of its business.”
After initially agreeing to return the units at short notice by September 15, Penske says Wyotrans has not returned them.
Allan NewDelman, Wyotrans’ attorney, said the company was forced to file for bankruptcy after one of the units rented from Penske was involved in a single-vehicle accident. The towing company charged over $100,000 to haul the equipment, which Penske paid but demanded reimbursement of the towing bill from Wyotrans, which the company did not have on hand.
Wyotrans, doing business as National Freight Carriers, filed for Chapter 11 bankruptcy in May with the US Bankruptcy Court for the District of Arizona.
In its summary petition, the company listed its assets ranging from $100,000 to $500,000 and its liabilities between $500,000 and $1 million. At the time, Wyotrans estimated that the funds would be distributed to unsecured creditors.
Christopher C. Simpson is a Chapter 11, Subchapter V trustee in the Wyotrans bankruptcy case.
“It’s a complicated case,” Simpson said during the Chapter 11 status hearing in July. “It’s a very difficult business to run, but we’re optimistic today.”
However, at Wyotrans’s status hearing in early September, Simpson was less optimistic.
“Part of my communication in court … was going to be that we were going to run into difficulties here,” Simpson said. “There appears to be a slight increase in unpaid administrative fees, a potentially significant increase. There are disputes between the parties regarding accounting. So I wanted to let the court know that my earlier cautious optimism has now reverted to simple caution.
Who owns Wyotrans LLC? It is complicated
Michelle Allen is listed as a Managing Member of BMA LLC, which was incorporated on December 3, 2019 in Sheridan, Wyoming. Allen signed Wyotrans’ bankruptcy petition.
The incorporation documents also list Allen as chief executive and her husband, David Allen, as executive director.
Court records in other cases allege David Allen placed assets in the name of his wife and son, Grayden Allen, to avoid creditors.
Before entering the trucking industry, Allen and Louder spent time in federal prison on fraud charges. The two still owe millions in restitution to victims under separate fraud schemes. No charges have been filed against Allen or Louder regarding Wyotrans’ Chapter 11 bankruptcy.
David Allen, 44, of Gilbert, Arizona, along with four family members who owned a boat dealership, was convicted of bank fraud on $5.4 million in January 2012. He was sentenced to 37 months in prison followed by five years of probation. He has also been ordered to pay more than $1.1 million in restitution since his release in June 2014.
Since then, David Allen has only paid about $12,000 of the $1.1 million he owes, according to the US Attorney’s Office Financial Litigation Unit.
Allen’s business partner, Louder, 43, of Plano, Texas, was convicted of conspiracy to commit mail fraud in U.S. District Court for the Eastern District of Texas. Lounder served 60 months in prison and was ordered to pay $17 million in restitution to his victims. Federal prosecutors allege Louder, co-founder of Quadwealth, conspired to devise a scheme to defraud investors by promising high rates of return on real estate and securities investments.
Louder is listed as president of MercTrucking and Mercury Holdings, the addresses being the same as BMA LLC in Sheridan, Wyoming. Wyotrans said it previously operated its trucking business as MercTrucking in its bankruptcy filing.
Some of the equipment the trucking company leased through Penske was leased through GBA LLC, which was incorporated on April 2, 2020 in Sheridan, Wyoming. David Allen’s son Grayden Allen is listed as GBA’s sole member and director. According to court documents filed in a separate case, Grayden Allen was just 19 at the time and likely was attending or had just returned from an overseas missionary program with The Church of Jesus Christ of Saints. of the Last Days.
According to court documents in a separate case, GBA LLC obtained a loan to purchase a home the family rented in Gilbert, Arizona, in October 2020. The government placed a lien on the property in November because the only activity on the account was the filings of David Allen or BMA LLC.
Since August 2021, the government has been in settlement discussions after David Allen wanted to refinance the property, but continued to send incomplete financial statements to the government and the title company.
Lani Carr, widow of Gabriel Fuentes Jr, filed a lawsuit alleging fraud allegations against Louder and David Allen in Bexar County, Texas in September 2020. Carr claims that shortly after the couple launched a hotshot transportation business, SLK G, LLC, with Louder and Allen in November 2019, Louder began funneling money from SLK’s business account to its entities, including Mercury Holding, according to the lawsuit.
Carr claims his signature was used without his permission by Louder to purchase new equipment and that he would not provide him or Fuentes with copies of the company’s profit and loss statements. Fuentes died unexpectedly on the road in April 2020. In May, she alleges that Louder altered the SLK operating agreement using a cryptic program that showed Louder owned 66% and Carr only owned 33%. The partnership agreement stated that Carr and Fuentes owned 50% of the business.
Disclosure: FreightWaves SONAR is listed as an unsecured creditor of Wyotrans.
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