A trucking and logistics company has abruptly closed, affecting 2,000 workers, just three years after being bought by private equity.
Out of the blue, US Logistics Solutions staff received word Thursday that they were out of work and would not receive their paychecks on Friday either.
About 500 were truck drivers and the rest were warehouse, dock and office workers for the Humble, Texas-based company.
Some employees said the loss of big contracts, such as a $30 million deal with Bath and Body Works and also one with Barnes & Noble, caused difficulties.
The 30-year-old company confirmed on monday It had filed for Chapter 7 bankruptcy, which means it has no intention of continuing and will sell all of its assets.
Eric Culberson, president of USLS, said in a LinkedIn post Saturday that he was “devastated” for the entire staff.
About 2,000 employees of US Logistics Solutions in Humble, Texas, have lost their jobs
On Thursday they were surprised with the news and also told they would not receive their last paycheck.
The company has been purchased by private equity firm Ten Oaks Group, based in Charlotte, North Carolina.
“Due to the abrupt decision by our privately held group to close our doors at the same time business was booming, I am completely devastated and heartbroken for the more than 2,000 professionals I have had the pleasure of working with,” Culberson wrote .
“The timing of this closure did not give me the opportunity to thank my team for their commitment and support to our customers and each other.”
Ten Oaks purchased a portion of Greenville, Tennessee-based Forward Air’s distribution business in February 2021, renamed it USLS and moved it to Texas.
Some former USLS employees, speaking anonymously with Load wavesThey said they were notified about the closure by the payroll company ADP.
Ten Oaks Group struggled to secure more financing from its lenders, forcing the abrupt closure of USLS.
Before ceasing operations, USLS operated 19 terminals, primarily on the eastern side of the country.
The United States has been hit by a wave of bankruptcy filings in recent months, affecting small and medium-sized businesses.
Chapter 7 bankruptcy is more severe than Chapter 11 and means that a business has no intention of continuing and sells all of its assets. Chapter 11 is considered a reorganization bankruptcy.
USLS operated 19 terminals before filing for Chapter 7 bankruptcy on Friday
“Despite the best efforts of its dedicated staff, the company has been notified by its lender that it will no longer receive the financing necessary to continue operations,” read a statement released Monday.
‘The decision to file for bankruptcy was not made lightly. The leadership team explored all possible alternatives to avoid this outcome, including pursuing additional investments and strategic partnerships.
“However, the abrupt cessation of funding left the company with no other recourse.”