Light Speed Logistics’ deepening financial crisis has reached a breaking point, according to a newly filed affidavit describing a carrier on the verge of operational collapse — with unpaid drivers threatening to abandon trucks, trailers and perishable freight across North America.
National Bank of Canada (NBC), owed more than US$9 million, filed the affidavit Dec. 4 as part of its request to have Ernst & Young appointed as a limited receiver over the equipment the bank financed. The filing outlines a trucking company that can no longer meet basic payroll obligations and is rapidly losing control of its fleet.
According to correspondence and financial information included in the affidavit, Light Speed told lenders it is carrying nine months of unpaid wages ($2.8 million), along with outstanding CRA source deductions ($500,000), and is facing a growing labor backlash.
Mechanics, dispatchers and safety staff have begun refusing work, and drivers — many of whom have not been paid since March — are warning they may leave equipment where it sits, the affidavit indicates.
The company also warned that if drivers walk off the job, some may disable tracking systems or shut off refrigeration units, leaving temperature-sensitive cargo to spoil. An impending loss of access to Loadlink load boards could strand additional trucks across the United States, the affidavit adds.
Light Speed acknowledged repair facilities across Canada and the United States are also refusing service, the affidavit says.
NBC argues that the situation places its collateral at “immediate and significant risk” and that Light Speed lacks the funding and operational capacity to retrieve or safeguard equipment spread across Canada and the United States.
CIBC sought and received a receivership order earlier in the week and has indicated the company overstated accounts receivable by at least $9 million through years of misrepresentation. And MNP has been appointed receiver on behalf of lender BDC.
The bank has since halted all operational financing, including payroll and fuel, leaving the carrier unable to continue normal operations. The NBC affidavit suggests that without CIBC’s ongoing funding of fuel and payroll, the fleet cannot continue operating and that it believes Light Speed has no remaining equity in the business.
