Shuttered Arkansas carrier files Chapter 7 bankruptcy
Arkansas-based trucking company forced to shut down nearly a year ago after being unable to get out of debt following a five-year legal battle over a $ 23million nuclear verdict dollars, requested liquidation of Chapter 7 on Monday.
In March 2020, RCX Solutions Inc. of Little Rock announced it was shutting down after its bank refused to extend the carrier’s line of credit, citing the costly legal verdict.
“We kind of got kicked out of the stool under us because the bank said they weren’t able to work with us because we still had it. [nuclear verdict] judgment hanging over our heads, ”Randy Clifton Jr., president of RCX Solutions, told FreightWaves at the time.
Since 2015, RCX Solutions has been waging a legal battle over a fatal accident that resulted in a “nuclear verdict” of $ 23 million in 2017, Clifton said.
Nuclear verdicts are described as jury prizes in which penalties exceed $ 10 million.
As the U.S. Circuit Court of Appeals for the 5th Circuit lowered the amount to $ 7.5 million at the end of 2019, it was too late to help the struggling carrier.
“These nuclear verdicts are driving some insurance companies out of the market, making insurance capacity tight,” Clifton, owner of a third-generation trucking company, told FreightWaves at the time of the shutdown.
His father, Randy Clifton Sr., started RCX in 2001. He handed over the reins to young Clifton in January 2010 after suffering a heart attack.
“Other insurance companies will be able to charge very high rates, which will force many small trucking companies to shut down because they cannot afford the rates,” said Randy Clifton Jr. “It’s just a vicious cycle all around.”
Chapter 7 filing
In its file, RCX Solutions lists its assets up to $ 50,000 and its liabilities between $ 1 million and $ 10 million. The now defunct trucking company says it has up to 49 creditors. The company maintains that no funds will be available to unsecured creditors once it pays the administrative fee.
Among the company’s unsecured creditors, who are the latest to be paid in the Chapter 7 cases, include J&J Capital Funding Equipment of Saint George, Utah, who owed nearly $ 977,000; Little Rock’s Stoughton Rental and Leasing Co. owed nearly $ 173,000; and Fleet One of Houston, owed more than $ 56,000.
According to RCX Solutions financial data, its gross revenue was nearly $ 1.4 million in 2020. This is a significant drop from the $ 12 million reported by the carrier in 2019.
A creditors’ meeting is scheduled for Feb. 23 at 8:30 a.m., according to the petition filed with the U.S. Eastern District Bankruptcy Court.
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