Legal woes force another trucking company to file for bankruptcy
Story by: Clarissa Hawes at FreightWaves
DM World Transportation LLC of Longwood, Florida, has filed for Chapter 11 bankruptcy protection. This action comes just two weeks after a trailer leasing company filed a motion for final summary judgment in a breach-of-contract lawsuit against the carrier and its CEO for nearly $1.3 million.
In its filing with the U.S. District Court for the Middle District of Florida, DM World lists assets ranging from $1 million to $10 million and liabilities between $10 million and $50 million. It lists up to 99 creditors in its bankruptcy filing.
The carrier hauls general freight, fresh produce and mail for the U.S. Postal Service. DM World has previously hauled Amazon loads.
U.S. Bankruptcy Judge Lori V. Vaughan granted DM World’s emergency motion on Monday to access its cash to pay approximately $106,000 in wages and medical benefits for its employees and truck drivers.
A day before responses to the summary judgment motion in a lawsuit filed against DM World and CEO Abduvosit Razikov were due on May 14, the court issued an automatic stay after the carrier’s attorney, R. Scott Shuker of Shuker & Dorris PA, stated both were planning to file for bankruptcy protection.
Shuker did not return FreightWaves’ email and telephone requests for comment.
In October, Texas-based Premier Trailer Leasing Inc. filed a lawsuit against DM World and Razikov, but the trailer leasing company claims it has been unable to serve the complaint to Razikov because he has been “absent from the U.S.” since the filing.
Premier filed a motion on Tuesday to reopen the case against Razikov because while the company has filed for bankruptcy protection, the former DM World CEO has not.
Razikov did not respond to FreightWaves’ request for comment regarding the bankruptcy filing or the current status of the lawsuit.
On its website, DM World states it is a truckload carrier with a fleet of 650 trucks and 1,600 dry van trailers, but in an Instagram post dated September 2019, it states it has 950 trucks and 2,000 trailers.
However, those numbers are much higher than what DM World filed with the Federal Motor Carrier Safety Administration in late January.
At the time of its bankruptcy filing, the carrier had 111 power units and 218 drivers, according to FMCSA’s SAFER website. DM World’s insurance is slated to be canceled on June 12.
Over the past 24 months, DM World trucks have been inspected 298 times and 36 trucks were placed out of service, resulting in a 12.1% out-of-service rate, which is lower than the industry’s national average of around 21%, according to FMCSA data. Its drivers were inspected 586 times and 13 were placed out of service in the same two-year period, resulting in a 2.2% out-of-service rate, which is below the national average of around 5.5%. The company has been involved in 16 injury crashes and 22 tow-aways over the past 24 months.
DM World has updated its business and mailing address to Burr Ridge, Illinois. An office manager of Regus US, a company that leases private offices and co-working spaces for businesses, verified the trucking company is a client and leases space at the Burr Ridge location, but provided no additional information.
A DM World employee who answered the phone at its offices in Longwood on Wednesday told FreightWaves he was unaware of the company’s bankruptcy filing and didn’t know the whereabouts of Razikov.
Read the whole story HERE at freightwaves
Source of original story and credits: freightwaves
This is a developing story.
