Update 7/28: Freightwaves just published a comprehensive update of the CoreFund situation.
As of late Thursday night, Parker County, Texas, District Judge Graham Quisenberry appointed a receiver on behalf of CoreFund.
In the Freightwaves article, Jason Medley, partner at Spencer Fane in Houston, noted, “This means that the receiver is able to act on behalf of CoreFund to release the UCC1s and notices of assignment and make payout arrangements. While the effect is not immediate — the receiver still needs to officially step into the process by paying a bond, etc. — the court’s order moves us much closer to addressing the needs of CoreFund’s factoring customers.”
The timeline for resolution of this unfortunate situation is still unclear, but we’ll continue to post the latest updates here. The full details and a timeline dating back to last week are below.
We’re actively working with a number of carriers affected by this situation to identify solutions for their unique situation. If you or someone you know needs support, please don’t hesitate to reach out.
VP with Express Freight Finance
Midway through the week of July 18th, clients reported being unable to reach CoreFund Capital, a freight factoring company based in Weatherford, Texas.
There was little to no prior warning other than a comment posted to an earlier Facebook thread from the company on Thursday, July 21st, at 8:30 PM.
As of Monday night, July 25th, the company confirmed via Facebook that, unfortunately, the entire CoreFund team was terminated.
Carriers are reporting their doors are currently locked, and no one is answering emails or phone calls.
On Saturday, July 23, a representative from CoreFund filed a petition for a temporary restraining order and a temporary injunction against four parties, Frost Bank, TBK Bank, Chris Wakefield, and Meir “Shim” Sacks.
Frost Bank and TBK Bank operate CoreFund’s operating accounts, while Wakefield and Sacks own controlling stakes in CoreFund’s holding company. As of Monday night, July 25th, Frost Bank has frozen CoreFund’s operating account, and it’s unknown at this time if TBK Bank has done the same.
The court documents state the rationale for “wrongfully shutting down” CoreFund’s business resulted from a “spat” between Wakefield and Sacks. Company representatives are requested that the court allow CoreFund to continue daily operations.
The case is scheduled to be heard in the Parker County, 415th District Court under Case No. CV22-0851. The date and time of the hearing are not clear at this time.
Disclaimer: The following information does not constitute legal advice.
Currently, CoreFund has a UCC Filing for all of its customers. UCC Filings are a standard part of almost all factoring agreements. You most often will hear of UCCs if one of your customers refuses payments to your factor or, in the case of CoreFund’s closing, if the factor does not make good on their payments to their carriers.
In basic terms, UCC stands for “Uniform Commercial Code.” Each state has its own legal and financial laws, but for businesses that typically operate across state lines, a UCC is a common set of laws that multiple states agree and abide by.
The most common UCC in trucking is a UCC-1 lien. These are formal, public records from your factoring company of the debt you’ve incurred, including any current factoring agreements.
If you’re currently a CoreFund client, because of the UCC currently governing your agreements, your customers will likely not be able to release any funds to another factor.
You Have Options
Attorney Jason Medley, in Houston, Texas, is filing an emergency intervention and involuntary receivership on behalf of all CoreFund carriers.
While we don’t know a timeframe for this petition, this action would allow the Texas courts to revoke all Notice of Assignments for CoreFund and all of their carrier UCC’s to be terminated.
Of note, Express Freight Factoring is a member of the International Factoring Association.
Alternatively, you may file a termination demand letter with CoreFund.
Per a recent thread in the International Factoring Association (IFA) forum from Jason Medley on the process of filing a termination demand letter:
“A 20-day notice under UCC 9-513(c) can be sent to CoreFund. This still has some risks if the Debtor actually owes money to the Secured Party. I have several carriers and other factors I am assisting with this, and I’m sure other attorneys are too. There are additional workarounds that can be explored.”
We’re Here to Help
We appreciate how complicated this process and situation can get, especially for smaller carriers.
Ashley Dellinger, Vice President at Express Freight Finance, said, “Carriers are upset and panicked at this time. The last thing we want to see them do is to lock themselves into long-term contracts as a short-term fix. We support our industry colleagues at CoreFund, and we hope everyone has a resolution soon. In the meantime, we are here to help.”
Effective immediately, Express Freight Finance will offer a 60-day contract with a 30-day release clause for those carriers impacted by this situation with no set-up, due diligence, or early termination fees.
If we can help in any other way, don’t hesitate to reach out to our team at Express Freight.
We will continue to post information here as the situation changes.
Have Questions? Contact Us.
Express Freight Finance