More than 100 Adversary Proceedings Initiated in New England Motor Freight, Inc. Bankruptcy
February 10, 2021, District of New Jersey – Kevin P. Clancy, as a trustee for the bankruptcy estate of New England Motor Freight Inc., recently filed complaints against 123 defendants to avoid and recover “preferential transfers” of property that occurred during the ninety (90) day period before the commencement of the bankruptcy proceedings of New England Motor Freight Inc. and its affiliated debtors (collectively, the “Debtors”) according to sections 544, 547(b) of the United States Code (the “Bankruptcy Code”). The Trustee also seeks to avoid and recover any transfers that constitute “fraudulent conveyance” under sections 548 and 550 of the Bankruptcy Code.
According to the papers filed in the court, the trucking company owes over $89 million, plus interest, fees, costs, and expenses to several pre-petition secured parties. By way of background, Debtors offered a broad range of transportation services throughout the United States and Canada. Debtors experienced severe liquidity constraints that led to the bankruptcy filing. The Debtors commenced their Chapter 11 cases to maximize the value of their assets and to effectuate an orderly liquidation process for the benefit of all creditors.
The largest case in the group (so far) is filed against Bestpass, Inc. for a return of $23,12,842.10, and American Universal LLC for recovery of $1,504,708.09. The Trustee has also sued Gallagher & Bassett Services, Inc. for a recovery of $ 1,511,921.50 for “fraudulent conveyances.”
Honorable Judge John K. Sherwood is presiding over the Debtors’ bankruptcy cases. The case number is 19-12809 (JKS) – New England Motor Freight, Inc, et al in United States Bankruptcy Court for the District of New Jersey. The Debtors sought bankruptcy protection two years ago on February 11, 2019.