Kitchener, Ont.-based JBT Transport and its affiliated companies have filed for creditor protection, after TD Bank demanded payment of $16.2 million in outstanding debt.
The related companies include Waydom Management, Melair Management, Heritage Truck Lines, Drumbo Transport, Heritage Northern Logistics, and Heritage Warehousing and Distribution.
Dodick Landau has filed a Notice of Intent on behalf of the companies and is the proposed monitor.
In its Factum of the Applicant, Dodick Landau notes, “Since the filing date, various transport carriers have refused to supply carriage services unless they receive payment of pre-filing arrears. Additionally, transport carriers have engaged in hostage tactics through the unlawful possession of the applicants’ property to obtain payment. The applicants also seek an order staying such carriers from contacting customers of the applicants directly or otherwise interfering with the applicants’ arrangements with their customers during the restructuring.”
JBT has been in business since 2002 and now collectively run 58 trucks, 162 dry vans and refrigerated trailers, and more than 100,000 sq.-ft. of warehouse space. It has 83 employees and 21 independent contractors working as truck drivers.
Its financial troubles began after a 2022 expansion through the acquisition of Drumbo, Heritage Truck Lines, Heritage Northern Logistics and Heritage Warehousing and Distribution.
“The expansion brought an exciting opportunity for the business to become a full-service provider and to cover a much broader service range,” the factum reads. “The acquisition also came with two real estate properties that required the JBT Group to incur significant costs for land development and construction.”
In September 2022, market conditions soured, and by March 2023 JBT was dealing with freight rates that had fallen 31.6%. JBT alone saw freight volumes decrease by $4.9 million by August 2023.
The factum suggests TD revised the terms of its loan structure, and over the course of 2024, as the companies reduced their debt with the bank from $25 million to $16.2 million. TD demanded full payment in January, and JBT says it was forced to file an NOI.
In addition to owing TD, the JBT Group has unsecured debt of about $25.6 million.
Operating under the NOI has been difficult.
The factum says: “Since the filing of the NOIs, operations have been severely impacted. Once carriers received notice of the NOI proceedings, several carriers have (1) held loads hostage pending payment of pre-filing amounts, (2) gone directly to customers to cut out the applicants as brokers and reduce or deny their corresponding commission, and (3) held loads hostage while demanding direct payment from customers, rather than through the JBT Group. The applicants now seek urgent relief in order to stabilize the situation with carriers and to prevent any further damage to their business while restructuring.”
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