A court-appointed receiver is seeking an order compelling the principals of Roadx Express to disclose the whereabouts of more than 350 pieces of equipment after the trucking company vacated its Georgetown, Ont., headquarters and left creditors searching for collateral.
Court filings show Royal Bank of Canada was owed more than CA$8.67 million and US$469,652 as of May 15 when it sought the appointment of a receiver over Roadx Express and related companies. The receiver was appointed June 2.
According to documents filed with the Ontario Superior Court of Justice, a representative of proposed receiver msi Spergel attended Roadx’s Georgetown premises on May 22 and found the truck yard empty, the office vacant, and exterior signage removed.
“RBC is not aware of what has happened to its collateral and does not know where its collateral is currently located,” the bank stated in court filings.
Roadx director Samreet Kaur Kahlon acknowledged in an affidavit that the yard and office were empty, but said equipment was moved as financial pressures mounted and the company fell behind on rent.
Kahlon said Roadx had missed three months of rent payments and feared a landlord lockout. She also claimed bailiffs acting for creditors had seized 11 trailers and two trucks and were harassing employees.
“In an effort to keep as many trucks and trailers available as possible for taking on work, and wanting to avoid the added cost of recovering equipment from the landlord if a lockout went ahead, I arranged for the trucks and trailers to move out from our truck yard,” Kahlon wrote in her affidavit.
She told the court the moves were a good-faith effort to keep the business operating and pledged to cooperate in identifying and locating equipment.
However, a June 10 report filed by the receiver alleges cooperation has not been forthcoming.
The receiver said it was provided with a list of more than 350 pieces of mobile equipment, but not their locations. It told the court that, despite repeated requests, it has been unable to determine where the assets are currently located.
“Without the assistance, the Receiver is unable to determine the location(s) of any of the Roadx Group’s mobile equipment,” the report states.
The receiver further argued that Kahlon should know where the assets are because she admitted arranging for equipment to be relocated from the Georgetown yard and was able to compile the equipment inventory provided to the receiver.
The filing also reveals that Roadx used Samsara electronic logging devices to track equipment, but the service had been suspended due to non-payment.
In addition, Paccar Financial reportedly advised the receiver that remote diagnostic systems capable of providing GPS coordinates had been removed or disabled on equipment financed by Paccar. The receiver said Paccar reported all but one unit last showed a location at the Georgetown facility. One unit was reportedly located at a repair facility in Laredo, Texas.
The receiver also cited correspondence from Roadx’s lawyer indicating some equipment had been moved to locations in Georgetown and London, Ont., before being recovered by secured creditors. The same correspondence indicated some equipment had reportedly been seized by a bailiff at a truck stop in St. Clair, Mich.
The receiver told the court it is concerned that equipment could be further dispersed because trucking assets are mobile and can easily cross borders.
“There is evidence from Paccar and Bhangu that some of the Debtors’ mobile equipment has already been relocated to the United States,” the receiver stated.
The receiver is asking the court to order Kahlon and her husband, Daljit Singh Kahlon, to identify within 48 hours the locations of all Roadx equipment and company records, and to attend examinations under oath.
The receiver argues that without access to the equipment and records, it cannot properly administer the receivership, determine the company’s assets and liabilities, identify employees and creditors, or assess potential obligations related to source deductions and HST remittances.
Roadx does not oppose the receivership. In her affidavit, Kahlon blamed the company’s collapse on the prolonged downturn in freight markets, saying the carrier was among many businesses launched during the strong freight conditions of 2021 that have struggled to survive the subsequent downturn.
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