Wise Choice Trans. Corp. Files for Chapter 7 Bankruptcy

California-based logistics company Wise Choice Trans. Corp. declares bankruptcy with assets and liabilities between $1 million and $10 million.

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empresa de logística de california se declara en bancarrota

Wise Choice, a third-party logistics company based in Hayward, California, has filed for Chapter 7 bankruptcy protection. The filing occurred in the U.S. Bankruptcy Court for the Northern District of California. Founded in 2009, the company was known for providing a range of logistics services, including final mile, less-than-truckload, and full truckload services in the San Francisco Bay area, along with warehouse and fulfillment services.

At the time of its closure, Wise Choice Trans. Corp. had a fleet of 34 power units and employed 33 drivers. The bankruptcy petition indicates that the company’s assets and liabilities range between $1 million and $10 million. The company has up to 49 creditors, and the petition suggests that there will be no funds available for unsecured creditors after administrative fees are paid. Erick Crespo, the CEO of Wise Choice, has also filed for personal bankruptcy protection.

Fremont Bank of Livermore, California, is listed as the top secured creditor, owed over $1.3 million for Freightliner tractors and other equipment. The largest unsecured creditor, Propella Capital LLC of Brooklyn, New York, is owed $100,000.

Wise Choice’s financial struggles are evident in its declining revenues, with a gross revenue of around $3.6 million in 2023, down from $4.2 million in 2022. Despite the financial downturn, the company had maintained a lower-than-average out-of-service rate for its trucks and drivers, as per the Federal Motor Carrier Safety Administration’s SAFER site data.

The company’s insurance was canceled on January 5th. Additionally, Wise Choice is involved in four legal actions, ongoing or concluded, in San Francisco Superior Court and Santa Clara Superior Court, though specific amounts involved in these cases were not detailed in the petition.

The filing underscores the challenges faced by logistics companies in maintaining financial stability amidst fluctuating market conditions and operational costs. The bankruptcy of Wise Choice Trans. Corp. is a significant event in the logistics industry, particularly in the San Francisco Bay area, where the company had established a notable presence.