Pilot Travel Centers Hits Defunct Carrier With $800,000 Lawsuit
Youngstown, Ohio – The hits keep on coming for recently shuttered Falcon Transport Co. after Pilot Travel Centers filed a nearly $800,000 lawsuit against the now-defunct carrier in Mahoning County Common Pleas Court on Tuesday.
The suit alleges Falcon left fuel invoices from April 11 to April 25 totaling $796,983 unpaid.
For those following the story, you will remember that Falcon suddenly closed operations on Saturday, April 27.
The company shut off fuel cards and left some drivers stranded after it notified its nearly 600 drivers of the closure by email and text message.
According to the new suit, Pilot alleges it had a fuel supply agreement with Falcon and would invoice the company weekly.
The terms of the agreement allowed Falcon up to 14 days to pay the balance, court documents indicate.
CounterPoint Capital Partners is also named in the suit.
In 2017, Falcon was purchased in a leveraged buyout by CounterPoint Capital Partners, a California-based Private Equity group, for $27 million with an additional $33 million in debt-financing, for a total of $60M.
Pilot alleges Counterpoint is Falcon’s “alter-ego” and withheld the funds the carrier needed to pay the fuel bills.
The suit also alleges breach of contract and unjust enrichment.
Pilot is also seeking pre- and post-judgment annual interest, as well as litigation costs.
Not The First And Most Likely Won’t Be The Last
This is not the first lawsuit filed against Falcon Transport Co. and CounterPoint Capital Partners.
Former Falcon Transport Co. employee, Mary Chavez, filed a civil action complaint against her former company on Monday, April 29 in U.S. District Court.
The suit alleges Falcon violated the Worker Adjustment and Retraining Notification (WARN) Act which requires company’s that employ at least 100 workers, and who put in at least 4,000 hours of aggregate labor per week, to provide 60 days written notice of mass layoffs.
In three letters filed Tuesday, May 7, with Ohio Department of Job & Family Services each dated April 27, Falcon Transport Co. officials acknowledged the company’s failure to provide the required 60-day notices to workers under the WARN Act.
Management of Falcon Transport Co. said it did not provide the notices to its more than 800 employees because it would have jeopardized the company’s efforts to raise more funding.
Additionally, officials outlined various “unforeseen business circumstances relating to material impairment of operations” which caused the company to end operations.
According to a recent report by Vindy.com, more than 40 former Falcon employees have also met with Cleveland attorneys and could be preparing to file class action litigation.
However, Chavez and her legal counsel are asking the court to declare her complaint a “class action” in order to allow other former Falcon colleagues to join.
Stay logged on to TransportationNation.com for the latest on the fallout from the abrupt closure of Falcon Transport Co.
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