Arrow Trucking records are in disarray

Patrick J. Malloy III, bankruptcy trustee in U.S. Bankruptcy Court for the Northern District of Oklahoma, said Arrow Trucking’s Chapter 7 bankruptcy filing last Friday is without precedent.

“We don’t have a schedule of assets, a schedule of liabilities and a statement of financial affairs,” he said. “Anyone who would be capable of providing that is not available. We’re going to have to reconstruct everything. It could take weeks.”

When Arrow Trucking filed its bankruptcy petition last week, court officials scheduled a meeting of creditors on the third floor courtroom of U.S. Bankruptcy Court, 224 S. Boulder Ave., at 1:30 p.m. Feb. 8. But Malloy said he isn’t sure whether he will be able to find the assets, liabilities and all the creditors in the case during the next 25 days.

“There might have to be more than one meeting of creditors because it’s doubtful we’ll have everything we need by that date,” Malloy said.

This is not the way a Chapter 7 bankruptcy case is supposed to proceed, lawyers and court officials said.

On the U.S. Bankruptcy Court’s Web site, a Chapter 7 filing or liquidation is described as “an orderly, court-supervised procedure by which a trustee takes over the assets of the debtor’s estate, reduces them to cash, and makes distributions to creditors, subject to the debtor’s right to retain certain exempt property

But little or nothing at Arrow Trucking has been “orderly” since company executives told employees to leave and closed corporate offices at 4230 S. Elwood Ave. on Dec. 22, employees and industry executives said.

Three days before Christmas, Arrow’s lender, Transportation Alliance Bank of Ogden, Utah, froze the company’s fuel credit cards, stranding hundreds of Arrow drivers and freight at truck stops and rest areas across the country.

Arrow lenders Daimler Truck Financial and Navistar Financial Corp., owner of most of Arrow’s trucks and trailers, offered drivers $200 or bus tickets home for the return of the equipment to truck dealers. But more than three weeks after Arrow’s shutdown, hundreds of trucks and trailers are unaccounted for, Daimler and Navistar officials said.

Arrow owner Carol Pielsticker, CEO Doug Pielsticker, Chief Financial Officer Jonathan Moore and Secretary and General Counsel Joseph Mowry simply disappeared in the wake of the company’s collapse. Before the bankruptcy filing, no Arrow executive or officer appeared in public to comment on the state or prospects of the company or the circumstances of its collapse.

Transportation Alliance Bank, however, filed a lawsuit against Arrow and its executives last week, alleging double-billing of invoices, bank fraud, wire fraud and “racketeering” activity that cost it $12.5 million.

In its bankruptcy filing, Arrow executives described the company’s assets as between $100 million and $500 million and liabilities in the same range.

“What does that spread tell you?” Malloy said. “It says it’s unknown. Somebody knows, but the people who do know simply aren’t available.”

Malloy said Carol Pielsticker has been cooperative, but she is unable to provide details of assets, liabilities and creditors.

“They have a computer and hopefully we will be imaging information from the computer and that will tell us some things,” Malloy said. “It’s a very plodding, deliberative and time-consuming process.”

The bankruptcy trustee said there are some known assets, including receivables, computers, office furniture, some trucks and trailers, and real estate owned by Arrow affiliate companies.

Secured creditors will have claims on particular assets, Malloy said. The priority of unsecured claims will be wage claims, tax claims and benefit claims, he said.

“We don’t know whether we will have any money to distribute at all,” Malloy said. “I’ve only been involved (with the Arrow bankruptcy) since Friday, so I don’t know.”

Then, the bankruptcy trustee reflected on the Arrow Trucking case in words that half a dozen drivers, employees and industry officials have used during the past three weeks. “I have never seen anything like this,” Malloy said.

In a related matter, C. David Rhoades, chief liquidation officer in the Arrow bankruptcy, has resigned.

Rhoades said his position became redundant after the Chapter 7 filing and the appointment of Malloy as trustee.