LWR freight subsidiary shut down [The Bradenton Herald, Fla.]

Dec. 30--LAKEWOOD RANCH -- An Oregon subsidiary of Integrated Freight Corp. has been shut down by federal safety regulators over licensing and insurance issues.

Company executives said the move is only temporary, and they're making plans for a restart-up next year once pending equipment financing is resolved.

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 150 drivers and 20 office workers at the Oregon facility 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.

"This is not permanent," Integrated President Hank Hoffman said of the shut down. "In the end, it was just unavoidable. We're getting this financing thing taken care of, which has taken way longer than we expected."

The company secured a $3.4 million loan to refinance previous equipment purchases at the Oregon subsidiary to trim operating costs.

That loan process requires an off-site appraisal of the equipment, which has prolonged the closing date. Cross Creek's former owner, who holds the original note on the equipment financing, has fought the step because he doesn't want to assume responsibility should something go awry during the transport.

With the appraisal now complete, Hoffman hopes to close by the end of the year. In the meantime, the company discontinued its required insurance to save money.

Integrated reported a three-month net loss of $2.8 million in the second-quarter report filed Sept. 30, with $13 million in total quarterly revenue, according to the Security Exchange Commission.

The company attributed the loss to the Cross Creek acquisition and liabilities surrounding a pending lawsuit involving Integrated's acquisition of a subsidiary in Nebraska, which Hoffman hopes the company will never actually have to pay.

Integrated acquired Cross Creek April 1. The company also recently bought a majority share of Bruenger Trucking Co. in Kansas, Morris Transportation in Arizona and Smith Systems Transportation in Nebraska.

Hoffman vows Integrated will ultimately emerge from the financial mess stronger than before.

"Because we've had this stand-down period, it's 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."

Josh Salman, Herald business writer can be reached at 941-745-7095.

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