A bankruptcy judge reportedly has found in favor of Cloverleaf Transportation against a leasing company eager to get its trucks back.
The two companies that lease trucks to Cloverleaf tried to cancel their contracts in the days leading up to the Chester, N.Y.-based trucking company’s Aug. 16 bankruptcy filing, according to the Times Herald-Record.
Bankruptcy Judge Cecelia Morris decided earlier this week that an Aug. 8 fax from Moretran Leasing Corp. of Saddle Brook, N.J., was insufficient to cancel the contracts for 17 trucks Cloverleaf leases, the newspaper reported. An Aug. 15 letter also terminating the leases, sent one day before Cloverleaf’s bankruptcy filings, is still in dispute.
Morris will hold a hearing Nov. 1 to decide if Ryder Truck Rental’s Aug. 15 letter canceling the leases for 22 trucks was sufficient.
The question to be settled is whether the termination letters were effective when they were sent – Aug. 15, one day before the bankruptcy filing – or when Cloverleaf received them, after the filing.
The leasing companies claim that when Cloverleaf filed for bankruptcy, they both were owed more than $100,000 in lease payments for the trucks, according to the Times Herald-Record.
The 39 trucks leased by Cloverleaf — a privately held regional carrier — make up nearly two-thirds of the company’s fleet of about 60 trucks, according to CEO Bruce Rogoff.
Cloverlead, which serves the Northeast, has assets of about $1.4 million and debts of about $7.3 million, according to papers filed Aug. 16 in U.S. Bankruptcy Court in Poughkeepsie, N.Y.
Cloverleaf, which employs 100 people, expects to stay in business and to break even, the papers said.
The Chapter 11 filing was brought on when its largest customer, Target Corp., terminated its contract with the company, the papers said.