A Texas trucking company, which hauled sand, gravel and cement, along with its affiliated companies have shuttered operations and recently filed for bankruptcy liquidation, citing serious financial conditions as the main reason.
Irving, Texas-based Sunset Logistics Inc. and its five Irving-based affiliated companies – Sunset Express Inc., Mobile Fleet Marketing Inc., Glidewell Leasing Co. LP, Glidewell LLC and Sun-Tech Leasing of Texas LP filed for Chapter 7 on Oct. 3 in the U.S. Bankruptcy Court for the Northern District of Texas.
In the bankruptcy petitions, Sunset Logistics and its affiliated companies claimed they were “unable to continue without debt relief.”
However, a lawsuit filed by Porter Capital of Birmingham, Alabama, alleges the entities defaulted on their recourse factoring agreement and owe Porter more than $5 million, plus accruing costs and expenses. That, the lawsuit claims, may have been the catalyst that forced the companies to file for Chapter 7 as the filings halt ongoing civil litigation until after the bankruptcy proceedings have been discharged.
Sunset Logistics’ 16-page petition with the court, along with the other five entities’ Chapter 7 filings, did not include its schedules of assets and liabilities or the company’s statement of financial affairs (SOFA), which were due Thursday. However, attorneys for the companies filed a motion Thursday, seeking a deadline extension to Oct. 31 to file the schedules and SOFA. The motion states that each company “must compile information from books, records, and documents relating to the claims of dozens of creditors.”
“Given the scope of the [companies’] operations and the interrelated nature of these Chapter 7 cases, it will take some time to gather and process such information,” Sunset Logistics’ motion states.
Sunset and its affiliates state that after administrative expenses are paid, no funds will be available for unsecured creditors in its bankruptcy liquidation petitions.
U.S. Bankruptcy Judge Michelle V. Larson has set a creditors’ meeting for Nov. 18. She has also appointed an interim trustee, Areya Holder of Addison, Texas, to oversee Sunset Logistics’ Chapter 7 proceedings.
Sunset Logistics and its entities are represented by bankruptcy attorney Brian Vanderwoude of Dorsey & Whitney LLP in Dallas. FreightWaves has reached out to Vanderwoude for comment.
While Sunset Logistics’ petition and the bankruptcy petitions filed for the five affiliated companies list the owners and managers of the entities as creditors, the filings do not include the claim amounts they say they are owed.
However, six companies have filed a proof of claim with the bankruptcy court against Sunset Logistics, amounting to over $3.7 million. J. Gil Trucking, an intrastate trucking company in Alvin, Texas, filed a claim, stating that it is owed more than $82,000 for its services hauling sand and gravel for Sunset Logistics. Williamson County, Texas, claims it is owed around $26,400 for unpaid business property taxes, and the Bell County Tax Appraisal District in Round Rock, Texas, states it is owed around $1,500.
The Collin County Tax Assessor-Collector’s office in McKinney, Texas, has filed a claim of more than $1,600 against Sunset Logistics, and Harris County says it is owed around $460 for unpaid ad valorem taxes for the years 2020 through 2023.
The largest creditor, Porter Capital, claims Sunset Logistics owes it $3.6 million, alleging it and several affiliated companies owned or managed by David Malay and his former business partner, John D. Glidewell, who died unexpectedly on May 25, defaulted on their recourse factoring agreement.
In its petition, Sunset Logistics lists its assets as up to $1 million and liabilities as between $10 million and $50 million.
Sunset Logistics’ bankruptcy filing states that Track Line LLC, owned by David Malay and his wife, Gabrielle Malay, paid the bankruptcy attorney’s fees for Sunset Logistics and the other companies that filed for bankruptcy liquidation on Oct 3.
Glidewell Leasing Co. LP of Irving
Glidewell Leasing’s bankruptcy petition states that it has up to 49 creditors, assets of up to $50,000 and liabilities between $10 million and $50 million. According to the docket, U.S. Bankruptcy Judge Scott W. Everett has appointed U.S. Trustee Jeffrey H. Mims to oversee Glidewell Leasing’s bankruptcy proceedings.
Three creditors have filed proof of claims with the bankruptcy court, totaling nearly $38,000 against Glidewell Leasing. Harris County claims it is owed around $36,000 in unpaid ad valorem taxes, the Collin County Tax Assessor-Collector’s office filed a claim for over $1,300 for unpaid taxes, and the Waco Independent School District states that it is owed nearly $900 from Glidewell Leasing.
According to Glidewell Leasing’s Chapter 7 petition, David Malay serves as the general partner of the company. He states that no funds will be available to unsecured creditors.
Glidewell LLC
In its bankruptcy petition, Glidewell LLC lists assets of up to $50,000 and liabilities of $1 million to $10 million. Malay is listed as the manager of Glidewell.
The company has no assets, according to its filing. Chief Bankruptcy Judge Stacey G. Jernigan is overseeing Glidewell’s bankruptcy case. A creditors’ meeting is set for Nov. 19.
Jernigan ordered that Glidewell’s 20 largest unsecured creditors’ matrix was to be filed by Oct. 7, but as of Thursday, nothing had been posted to the bankruptcy court’s docket. The creditor matrix must include the names and addresses and the amounts owed to them. Mims is also serving as the trustee for Glidewell’s bankruptcy case.
Mobile Fleet Marketing
Mobile Fleet Marketing, doing business as Mobile Fleet Maintenance, states in its bankruptcy petition that it has assets of up to $50,000 and liabilities of $10 million to $50 million. Everett is presiding over the bankruptcy case, and Hims has been appointed as trustee. The Malays serve as the board of directors of Mobile Fleet Maintenance.
Sunset Express Inc.
Sunset Express’ 15-page bankruptcy petition lists its assets as up to $1 million and liabilities as between $10 million and $50 million. Everett, who is presiding over Sunset Express’ bankruptcy case, has set a creditors’ meeting for Nov. 19. The Malays serve as the board of directors of Sunset Express.
Sunset Express lists 22 creditors, including all of its affiliated companies and its general partners and officers of the company, including Gabrielle Malay, David Malay and Tammy Sue Glidewell, who is executor of the estate of John Glidewell, although no claim amounts were included in the Chapter 7 petition.
Sun-Tech Leasing of Texas LP
Sun-Tech Leasing lists its assets of up to $50,000 and liabilities of $10 million to $50 million. David Malay is listed as general partner of Sun-Tech Leasing. Its petition lists 25 creditors, including the affiliated companies and general partners and executives of the other entities that filed for bankruptcy on Oct.3.
Since its bankruptcy filing, secured creditors have filed two proofs of claims against Sun-Tech Leasing for nearly $82,000, including Harris County for over $77,000 for ad valorem taxes and the Collin County Tax Assessor for more than $4,600.
Larson has set the creditors’ meeting for Nov. 19. She stated that the last day to file claims is Dec. 12.
What sparked the bankruptcy filings?
In its bankruptcy petitions, Sunset Logistics and its affiliated companies claimed they were in serious financial distress and were “unable to continue without debt relief.” However, a breach-of-contract lawsuit, filled in the U.S. District Court for the Northern District of Alabama in April 2024, claims the recourse factoring agreement was secured by the personal guarantees of John Glidewell, who was the original owner of the “seller companies” listed below before his death, along with David Malay and his company, Track Line LLC.
According to a joint press release issued on May 1, 2023, Track Line, a provider of specialized railway contract services, acquired Sunset Logistics in January 2023, four months before Glidewell’s death on May 25, 2023. Malay, who served as CEO of the entities, said the companies’ mission was to “provide clients with safe, reliable and efficient logistical freight and transportation rail solutions,” according to the release.
In July, Porter Capital filed its first amended complaint against the seller companies and individuals listed below:
- Sunset Logistics Inc.
- Mobile Fleet Marketing.
- Alpine Aggregate Transport.
- Sunset Express Inc.
- Capstone Fuel Services Inc.
- Sunset Tank Express Inc.
- Glidewell Leasing Co. LP.
- Sun-Tech Leasing of Texas LP.
- Tammy Sue Glidewell, executor of the estate of John Glidewell.
- The estate of John Glidewell.
- David Malay.
- Track Line LLC.
According to the amended suit, the seller companies received about $4.3 million in advances from Porter Capital after the factoring company purchased accounts from the seller companies for more than $3 million and advanced funds to the seller companies of about $2.5 million in March 2021. Porter Capital also filed a UCC-1 financing statement with the Texas secretary of state that month, placing a blanket lien on the seller companies’ accounts and inventory, according to the lawsuit.
In June 2022, Porter Capital claimed it and the seller companies amended the factoring agreement. However, in January 2024, Porter Capital alleges the seller companies stopped submitting accounts to the factoring company and defaulted on its agreement that was secured by the personal guarantees of Glidewell, David Malay and Track Line.
“John Glidewell was the original owner of the seller companies. After he passed away in May 2023, Malay and his company Track Line, LLC executed individual and entity guarantees on behalf of all seller companies besides Alpine Aggregate Transport, Inc.,” according to the amended complaint.
In July, Chief U.S. District Judge R. David Proctor granted Porter Capital’s motion to set aside a default judgment against two of the companies initially listed in the lawsuit, Capstone Fuel Services and Sunset Tank Express, after the clerk of court entered an entry of default against the entities on June 12.
In its motion, Porter Capital states that Glidewell’s estate failed to respond to its complaint by May 16 but later “learned that the two companies had not been dissolved or sold by Mr. Glidewell before his death with the other Glidewell controlled entities, and that these entities were still owned by his estate.”
Prior to his death, Glidewell allegedly sold the majority of his business interests to Track Line LLC, owned by the Malays, as well as some of the co-defendants in this lawsuit and began to work for Track Line LLC. Capstone Fuel Services and Sunset Tank Express, the two entities subject to the motion filed by Porter Capital, claim to have ceased operations in 2019 and were to be dissolved.
“Following Mr. Glidewell’s tragic and unexpected death, it was unclear to the Estate which of Mr. Glidewell’s prior entities were sold, which were dissolved, and which were still in existence and owned by the Estate. As such, when the Defendants were served, the Estate was unaware that these entities still existed, much less that they were owned by the Estate,” according to the motion.
In fact, the lawsuit alleges that the Texas secretary of state records reflect that public information reports were filed on behalf of these entities in September 2023 after Glidewell’s death, and were signed by Track Line CEO David Malay, stating that Glidewell was the president and secretary of these entities, even though he was already deceased.
A default judgment was entered in June against Track Line and its CEO, David Malay, after he failed to respond to the original complaint by the May 16 deadline. On Sept. 30, Malay filed his answers to the amended complaint.
On Oct. 9, six days after Sunset and the five affiliated companies filed for bankruptcy, Porter Capital filed a default judgment against Alpine Aggregate Transport of Fort Worth, which didn’t file for Chapter 7. Alpine’s broker authority was involuntarily revoked in September, according to the Federal Motor Carrier Administration’s SAFER website. Its common carrier authority was revoked in August 2022.
In its motion for default judgment, Porter Capital served Alpine Aggregate in July with a notice of the complaint filed against it and the other entities. After it failed to respond to the complaint, the clerk of court entered a default judgment against Alpine. In its motion, Porter Capital claims Alpine and the other seller companies stopped submitting accounts and failed to timely pay their obligations under the factoring agreement.
According to the motion, Porter Capital wants Alpine to pay over $3.1 million and seeks possession of Alpine’s collateral to offset its debts to the factoring company after finding out that Alpine’s purchased accounts were subject to garnishment proceedings. The factoring company also learned that another significant account was subject to dispute and Porter Capital was unlikely to be paid.
As of Thursday, Proctor has not ruled on Porter Capital’s motion for default judgment against Alpine Aggregate.
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