Miranda Logistics Enterprise Inc. and its affiliate, Grit & Gravel Inc., both California-based trucking companies specializing in earthwork, excavation, and demolition, have filed for Chapter 11 bankruptcy protection. The filings, submitted to the U.S. Bankruptcy Court for the Central District of California, cite cash flow difficulties stemming from a defaulted factoring agreement. The companies have been operating since 1992.
Table Content:
- Factoring Agreement Default Triggers Financial Distress
- Mounting Debt and Aggressive Collection Practices Lead to Bankruptcy
- Assets, Liabilities, and Creditors Listed in Bankruptcy Petitions
- Legal Challenges and Upcoming Court Dates
- Miranda Logistics’ Safety Record Under Scrutiny
- Future Uncertain for California Trucking Companies
Factoring Agreement Default Triggers Financial Distress
According to court documents, Miranda Logistics and Grit & Gravel entered into a factoring agreement with Mission Valley Bank (MVB) in March 2023. This agreement, designed to provide immediate cash flow by selling accounts receivables, ultimately contributed to the companies’ financial downfall. Stephanie Miranda, co-founder and chief operating officer, explained in her declaration that the agreement placed 100% of the risk of loss on Miranda Logistics and Grit & Gravel. This meant that if clients failed to pay their invoices, the companies remained liable to MVB for the full amount.
Mounting Debt and Aggressive Collection Practices Lead to Bankruptcy
At the time of filing, Miranda Logistics reportedly owed MVB approximately $2.8 million under the factoring agreement. MVB had also secured liens against the company’s receivables and equipment, totaling around $10.6 million. In December 2024, MVB allegedly began contacting Miranda Logistics’ customers directly, demanding payment be remitted to the bank. This action effectively froze the companies’ cash flow, making it impossible to meet payroll obligations of around $27,000 and ultimately forcing the bankruptcy filings.
Grit & Gravel claims it was forced to shut down its operations completely and terminated all employees on Dec. 28, 2024. The companies are seeking bankruptcy protection to reorganize their finances and potentially resume operations.
Assets, Liabilities, and Creditors Listed in Bankruptcy Petitions
Both Miranda Logistics and Grit & Gravel listed assets up to $50,000 and liabilities between $1 million and $10 million in their respective petitions. Each company reported up to 99 creditors and indicated that funds would be available for distribution to unsecured creditors. Mission Valley Bank is listed as the largest creditor for both entities, with claims of nearly $3.5 million against Miranda Logistics and $2.5 million against Grit & Gravel. Other significant creditors include MCB Trucking and Clean Harbors Environmental.
Legal Challenges and Upcoming Court Dates
Grit & Gravel has filed a motion to dismiss its Chapter 11 case, arguing that MVB’s aggressive pre-petition collection practices unfairly hindered its ability to continue business operations. A court date for this motion is scheduled for January 28th. A creditors’ meeting for both companies is set for January 29th, and a status hearing before U.S. Bankruptcy Judge Vincent Zurzolo is scheduled for February 13th.
Miranda Logistics’ Safety Record Under Scrutiny
Federal Motor Carrier Safety Administration (FMCSA) data reveals that Miranda Logistics operated 40 power units and employed 25 drivers. The company’s safety record shows a 33% out-of-service rate for vehicle inspections, significantly higher than the national average of 22.3%. While none of its drivers were placed out of service, the higher vehicle out-of-service rate raises concerns about the company’s overall safety practices.
Future Uncertain for California Trucking Companies
The bankruptcy filings of Miranda Logistics and Grit & Gravel underscore the challenges faced by trucking companies in a competitive industry with fluctuating fuel costs and tight margins. The outcome of the bankruptcy proceedings and the legal challenges surrounding the factoring agreement with MVB will determine the future of these two California trucking companies.
