LAKEWOOD RANCH -- An Oregon subsidiary of Integrated Freight Corp. has been shut down by federal safety regulators over licensing and insurance issues.
Headquartered in Lakewood Ranch, Integrated Freight Corp. has been in financial turmoil the past eight months after acquiring Cross Creek Trucking, a Medford, Ore.-based carrier of organic fruit and vegetables.
The Federal Motor Carrier Safety Administration seized Cross Creek’s operating license Dec. 19 because the company failed to meet its $750,000 insurance requirement, government records show.
More than 200 employees working at the Oregon facility, including drivers, have been laid off. Even before that, trucks were idled, parts not properly stocked, and fuel was in short supply, according to reports from previous employees.
Company executives say the shut down is only temporary, and are making plans for restart-up once the equipment financing is in hand. They hope to close on the loan by the end of the year.
"This is not permanent," Integrated President Hank Hoffman said. "Unfortunately, it's just something that had to be done. We're getting this financing thing taken care of, which is taking way longer than we expected."
Hoffman said many of the recent financial losses reported were non-cash items and liabilities from a pending lawsuit surrounding the company's acquisition in Nebraska. He promises Integrated will emerge from the financial mess stronger than before.
"Because we've had this stand-down period, it has given us an opportunity to look at the business in great detail and see operationally what we could have done better," he said. "We will be making those changes in the restart-up.
The company secured a $3.4 million loan to restructure equipment purchases at the Oregon subsidiary after experiencing “unexpected complications” and delays in Cross Creek financial audits, according to the September report filed with the Security Exchange Commission.
Integrated reported a three-month net loss of $2.8 million in the second-quarter report filed Sept. 30. The company, with $13 million in quarterly revenue, attributed the loss to Cross Creek acquisition, among other complications.
Josh Salman, Herald business writer can be reached at 941-745-7095.