The Chapter 11 bankruptcy of trucking company Wyotrans, doing business as National Freight Carriers, took a difficult turn after two of its largest secured creditors said they had not received payment for two months for leased or leased equipment used for the haul. cargo, and that the carrier is also behind in paying insurance premiums.

Aside from the bankruptcy issues, the two people involved in the day-to-day operations of Arizona-based Wyotrans, David Allen and Jeremy Lauder, have ties to at least three other trucking companies formed through various LLCs over the past five years.

U.S. Bankruptcy Judge Daniel P. Collins scheduled a hearing for Wednesday after Wyotrans’ insurer, IPFS Corp., claims it is owed nearly $84,000 in monthly payments after filing a petition for July and August.

In its petition, IPFS is seeking “power to cancel certain insurance policies and collect all unearned premiums” owed to the insurance company.

In court documents, Penske alleges that Wyotrans leases and leases about 26 trucks and trailers and owes more than $560,000 in post-petition payments.

In its motion, Penske alleges that Wyotrans stopped paying fees to the leasing company on Aug. 1, while continuing to use and own its equipment “in the course of its business.”

After initially agreeing to return the short-term units by Sept. 15, Penske claims Wyotrans failed to return them.

Alan NewDelman, an attorney for Wyotrans, said the company was forced to file for bankruptcy after one of the units leased from Penske was involved in a single-vehicle accident. The towing company charged more than $100,000 for the removal of the equipment, which Penske paid, but demanded Wyotrans reimburse the company for the towing cost, which the company did not have.

Wyotrans, doing business as National Freight Carriers, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Arizona.

In its net petition, the company listed its assets in the range of $100,000 to $500,000 and its liabilities in the range of $500,000 to $1 million. At the time, Wyotrans estimated that the funds would be distributed to unsecured creditors.

Christopher C. Simpson serves as Chapter V Chapter 11 Trustee in the Wyotrans Bankruptcy Case.

“It’s a complicated business,” Simpson said at a Chapter 11 status hearing in July. “Running this business is very difficult, but today we are optimistic.”

At the Wyotrans status hearing in early September, however, Simpson said he was less optimistic.

“Part of my pitch to the court … was going to be that we’re going to have a hard time,” Simpson said. “There seems to be a rise in unpaid administrative fees, a significant potential rise. There is an accounting dispute between the parties. Therefore, I wanted to inform the court that my previous cautious optimism has now returned to caution.”

Who owns Wyotrans LLC? It’s complicated

Michelle Allen is listed as the managing member of BMA LLC, which was incorporated on December 3, 2019 in Sheridan, Wyoming. Allen signed the Wyotrans bankruptcy filing.

Registration documents also list Allen as chief executive officer and her husband, David Allen, as executive director.

Court documents in other cases allege David Allen is placing assets in the names of his wife and son Grayden Allen to avoid creditors.

Before entering the trucking industry, Allen and Lauder spent time in federal prison on fraud charges. Both still have to pay millions in restitution to victims of various fraudulent schemes. No charges have been filed against Allen and Lauder in connection with Wyotrans’ Chapter 11 bankruptcy.

David Allen, 44, of Gilbert, Arizona, along with four members of his family who owned the boathouse, was convicted of bank fraud from $5.4 million in January 2012. He was sentenced to 37 months in prison followed by 5 years of supervised release. He was also ordered to pay more than $1.1 million in restitution after his release in June 2014.

Since then, David Allen has paid only about $12,000 of the $1.1 million he owes, according to the U.S. Attorney’s Office’s Financial Forensics Unit.

Allen’s business partner, Lauder, 43, of Plano, Texas, was convicted of conspiracy to commit mail fraud in the U.S. District Court for the Eastern District of Texas. Launder served 60 months in prison and was ordered to pay $17 million in restitution to his victims. Federal prosecutors allege that Lauder, the co-founder of Quadwealth, conspired to defraud investors by promising them high returns on real estate and securities investments.

Lauder is listed as the president of MercTrucking and Mercury Holdings, the addresses match those of BMA LLC in Sheridan, Wyoming. In its bankruptcy filing, Wyotrans indicated that it previously operated a trucking business under the name MercTrucking.

Some of the equipment the trucking company leased through Penske was through GBA LLC, formed on April 2, 2020 in Sheridan, Wyoming. David Allen’s son, Grayden Allen, is listed as the sole member and head of GBA. According to court records in another case, Grayden Allen was just 19 years old at the time and may have been involved in, or had just returned from, a foreign missionary program with The Church of Jesus Christ of Latter-day Saints.

Legal problems

According to court documents in another case, GBA LLC obtained a loan to purchase a home the family was renting in Gilbert, Arizona, in October 2020. In November, the government placed a lien on the property because the only activity on the account was deposits with David Allen or BMA LLC.

Since August 2021, the government has been in settlement discussions after David Allen wanted to refinance the property but continued to send incomplete financial statements to the government and the title company.

Lani Carr, the widow of Gabriel Fuentes Jr., filed a fraud lawsuit in September 2020 against Lowder and David Allen in Bexar County, Texas. Carr alleges that shortly after the couple opened SLK G, LLC, a hot transportation business, in November 2019, Lauder and Allen began funneling money from SLK’s business account to his entities, including Mercury Holding, according to the lawsuit.

Carr alleges that her signature was used by Louder without her permission to purchase new equipment and that he did not provide her or Fuentes with a copy of the company’s profit and loss statements. Fuentes died unexpectedly en route in April 2020. In May, she claims that Lauder changed SLK’s operating agreement with an encrypted program that showed Lauder owned 66% and Carr only 33%. In the partnership agreement, Carr and Fuentes own 50% of the business.

Disclosure: FreightWaves SONAR is listed as an unsecured creditor of Wyotrans.

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