Tung Air Transport and affiliate R. Lessard Trucking have been put into receivership, at the request of RBC, which claims the companies owe it some $18 million.
A judge denied giving Tung Air an extension to close a financing deal with Aureus Capital Management, which Tung said would allow it to settle its debt with RBC. However, it only had a letter of intent from the lender, and needed more time — at least until May 30 — to close the deal.
Tung Air was founded in 2002 by Sardara Tung, beginning with a single truck. At its peak in 2022, it generated annual revenue of $17 million and operated as many as 70 trucks and 200 trailers.
Affiliate R. Lessard Trucking hauled and sold aggregate materials in Southern Ontario.
“Until [Tung Air] ran into the financial slow-down that is widespread across the industry beginning in early 2023, they were widely regarded as a success story, and were able to make the necessary payments pursuant to the credit arrangements,” a factum filed with the courts reads.
“Unfortunately, the combination of the industry-wide slowdown which affected Tung Air and Lessard, some operational and financial system flaws, and some real estate purchases which diminished the [companies’] excess cash-flow, they began experiencing periodic cash-flow shortages in 2024.”
As of March 31, the company had less than $100,000 in its combined accounts. “The debtors have also had approximately 35 of their trailers seized by Carrier Systems because of a payment dispute about storage fees in February,” the court noted in its endorsement.
“This impacted the debtor’s business as clients stopped paying accounts and deductions were applied to balances owing to the debtors to account for costs incurred by clients to recover goods in the trailers. The respondents do not dispute that there is a significant cash flow issue. They have not put forward any evidence as to how the business could operate on a cash flow basis if the receivership was not granted or adjourned to some fashion until the end of May 2025.”
Spergel has been appointed as receiver.
