Canadian trucking company FTI owed more than C$18 million to creditors when it filed for bankruptcy in September, according to court filings that offer a glimpse into one of the few known Canadian trucking failures in 2019.
FTI Holdings, which closed in August alongside its U.S. sibling HVH, owed C$16 million of the C$18.2 million (a Canadian dollar equals US$0.76) to U.S. Bank in bankruptcy documents filed in Ontario on October 9.
FTI’s former owner, HCI Equity Partners, is seeking C$1.1 million. HCI purchased FTI in 2014 and merged it with HVH.
Filings by FTI and two of its companies reveal an expansive list of unpaid bills. They include more than C$271,000 to the Canadian government connected with taxes, C$56,000 in tolls for Ontario’s Highway 407 Electronic Toll Route, C$20,000 to the Detroit International Bridge Authority, and numerous bills for maintenance, trailers and other services.
FTI and its companies do not appear to list any trucks as assets, though the filings make reference to C$1.1 million in capital leases.
FTI has been something of an outlier in Canada, which has seen few trucking closures in 2019 unlike the in U.S. TFI International closed its Highland Transport division in May.
A federal registry of bankruptcies of C$5 million and above lists no other trucking entries for 2019.
Canadian trucking has experienced similar market headwinds to those in the U.S. in 2019, which boil down to less freight and too many trucks.
Mike McCarron, president of Toronto-based consulting firm Left Lane and Associates, opined in Today’s Trucking that Canada’s should have had more than 60 trucking closures this year had it kept pace with the U.S.
“To what can we chalk up our improved survival rate? One reason is that Canada has a far more rigid lending environment, which makes capital tougher to access,” McCarron wrote.
FTI’s use of U.S. financing from U.S. Bank isn’t surprising considering that its owner was an American firm, HCI Equity.
But Canadian firms, especially ones with poorer credit, are increasingly getting funding in the United States, a 2019 Bank of Canada report said.
A U.S. Bank spokesperson declined to comment on the FTI bankruptcy.
A hearing on FTI’s bankruptcy is set for October 18.
