OTA may get involved in TCT Logistics receivership (April 08, 2002)

The Ontario Trucking Association (OTA) says it’s willing to coordinate a legal challenge in the TCT Logistics receivership.

Lawyers for KPMG, trustees in the TCT Logistics receivership, have applied to the courts for an order to release funds for transportation services. The trustee is concerned that the trust requirements for load brokers under the provincial Truck Transportation Act may tie up funds to the extent that the two major secured creditors (who are owed $70 million) may not see some or all of their money.

"By trying to move this matter under federal bankruptcy law, presumably the trustee could then argue that federal law has paramountcy over provincial law," the OTA says. "If successful this could effectively eliminate the possibility of the many carriers that are unsecured creditors, receiving any of the funds they are owed."

The application is to be heard on April 18th.

Up until now, the trustee had been setting "carrier" funds aside in a special account as a precaution. However, if lawyers for the trustee are successful, the "carrier" funds could be released to the trustee to pay the secured creditors.

The OTA says it is prepared to assist in retaining a law firm and putting together a group of carriers who wish to be represented in this matter and to share legal costs. It has sent a participation/commitment form to Ontario-based carriers, or OTA members that are owed a minimum of $2,000. Carriers are asked to contribute $1,000 each to take part in the legal action.