Paladin Capital: 25-Entity Trucking Portfolio Converts to Chapter 7 in 23 Days

Paladin Capital, Inc., a Brentwood, Tennessee-based private equity holding company that owned and operated a portfolio of trucking, logistics, and transportation services companies, filed 25 jointly administered chapter 11 petitions on January 26, 2026, in the U.S. Bankruptcy Court for the Middle District of Tennessee (Case No. 3:26-bk-00316, Judge Charles M. Walker). The petitions listed estimated assets of $10 million to $50 million and liabilities of $100 million to $500 million. The cases converted to chapter 7 liquidation by agreed order on February 18, 2026 — 23 days after the petition date — and Jeanne Ann Burton was appointed as chapter 7 trustee.

Paladin entered chapter 11 with the stated intention of pursuing section 363 sales of individual business units to preserve operations and jobs. No sale process launched before conversion. CEO Brian Hall told the court he believed "there may well be buyers for some or all of the business units" but that it did not appear likely any single buyer would acquire the entire enterprise. The agreed conversion indicates that both the debtors and key creditors concluded that reorganization was not feasible.

Debtor(s)	Paladin Capital, Inc. (25 jointly administered entities)
Court	U.S. Bankruptcy Court, Middle District of Tennessee
Case Number	3:26-bk-00316
Judge	Hon. Charles M. Walker
Petition Date	January 26, 2026
Estimated Assets	$10 million – $50 million
Estimated Liabilities	$100 million – $500 million
Chapter	Converted to chapter 7 on February 18, 2026
Chapter 7 Trustee	Jeanne Ann Burton
Estimated Creditors	In excess of 10,000

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Trucking Portfolio and Debtor Entities

Paladin Capital operated as the parent of a portfolio of 25 affiliated entities spanning regional carriers, freight operations, equipment leasing, logistics, warehousing, and a captive insurance subsidiary. The workforce totaled approximately 912 employees, of whom approximately 600 were full time. The debtor group included:

• Quickway family (Quickway Transportation, Inc.; Quickway Carriers, Inc.; Quickway Logistics, Inc.; Quickway Services, Inc.; QW Leasing) — Nashville-area trucking and logistics operations with more than 450 employees. Quickway Carriers operated 89 tractors and Quickway Transportation had 228 power units and 319 drivers as of early February 2026.
• Robert Bearden, Inc. — a Southeast regional carrier based in Cairo, Georgia, operating approximately 143 power units and 128 drivers with more than 150 employees. Robert Bearden had been a "major drain on cash" within the portfolio but had recently won a new contract.
• Magnum family (Magnum Express, Inc.; Magnum Logistics, Inc.; Magnum Warehouse Services, LLC) — express freight and warehousing operations.
• Other carriers and subsidiaries — Volunteer Express, Inc.; Dolphin Line, Inc.; SG Express, Inc.; SNL Distributing Services Corp. (48 tractors); Central Logistics, Inc. (North Carolina-based LTL, TL, and flatbed carrier).
• Equipment and services — Capital City Leasing, Inc.; RC Trailer Sales & Service Company, Inc.; RC Enterprises, LLC; Nacarato Truck Leasing; Wildhorse Fleet Services, LLC.
• Other entities — CCL Permitting, LLC; Freight Contracting Services, LLC; K&L, LLC; L Street Ventures Inc.; Sutherland National Insurance Company, LLC (captive insurer).

All operating entities were employee stock ownership program (ESOP) entities. The debtors also maintained a 401(k) retirement plan. The workforce included union truck drivers represented by Teamsters Union Local No. 614.

Freight Recession and Cross-Default Cascade

Paladin Capital cited prolonged freight market weakness, rising insurance and equipment costs, and liquidity pressures tied to its lending arrangements as the drivers of the filing. The company said it defaulted under a credit facility with Truist Bank after insurers drew on letters of credit tied to accident claims, draining cash needed to service equipment leases. Paladin had been unable to make equipment payments since June 2025.

The cross-default provisions in the portfolio's lending arrangements accelerated the crisis. Capital City Leasing, Inc. defaulted on a material loan facility with Truist Financial Corporation, and Pinnacle Bank issued a Default Notice on October 21, 2025, under the cross-default provisions of its Master Lease Agreement with Capital City. Truist withdrew payments to equipment lenders and on January 16, 2026, issued a notice of forbearance default.

On January 21, Bank of Montreal issued a default notice seeking return of equipment. Paladin on January 22 proposed a weekly payment program to its equipment lenders, but Bank of Montreal declined the terms on January 23. Three days later, the 25 entities filed chapter 11 petitions.

Quickway Transportation had already shut down its Murfreesboro, Tennessee facility on June 15, 2025, resulting in layoffs for 45 employees. In November 2025, Paladin retained Cards Consulting to pursue an out-of-court restructuring, which did not succeed.

Capital Structure and Secured Creditors

Paladin owed Truist Bank $14.64 million. The company owed Bank of Montreal, First Horizon, and Bank of America approximately $20 million each for equipment leases. On February 5, the court approved DIP financing through Truist to make payroll of nearly $1.5 million for the weeks ending February 6 and February 13.

Pinnacle Bank was owed $492,384.39 under a Master Lease Agreement dated December 13, 2023, with Capital City Leasing, secured by five Cumberland International Trucks. The lease was guaranteed by Paladin Capital, Inc. The vehicles were subleased to Quickway Carriers, Inc.

IPFS Corporation provided $2,172,389.62 in premium financing (September 2025) and $247,992.58 in additional insurance premium financing (October 2025) to enable the debtors to purchase commercial excess liability and commercial insurance coverage. As of March 26, 2026, the debtors owed no less than $1,387,188.90. The loans were secured by unearned premiums valued at approximately $1,659,409.95, declining at approximately $7,758.24 per day.

Other secured equipment creditors seeking relief from the automatic stay included Fleet Equipment Leasing, LLC; Navistar Leasing Company; BMO Bank N.A. (f/k/a BMO Harris Bank N.A.); Banc of America Leasing & Capital, LLC; First Horizon Bank; and Daimler Truck Financial Services USA LLC.

Conversion to Chapter 7

The cases converted from chapter 11 to chapter 7 by agreed order on February 18, 2026, just 23 days after the petition date. No sale orders, bidding procedures, or plans of reorganization were filed before conversion. The initial intent to pursue section 363 sales of individual business units did not materialize during the brief chapter 11 period.

The chapter 7 trustee, Jeanne Ann Burton, retained Thompson Burton PLLC as counsel (approved March 17, 2026) and Newpoint Advisors Corporation as financial advisor (application filed March 12, 2026). Newpoint's scope includes financial record reconstruction, 401(k) plan shutdown, ESOP review, union communications with Teamsters Local No. 614, self-insurance wind-down, workers' compensation audits, claims reconciliation, and litigation support. The trustee also retained Stretto, Inc. as claims and noticing agent, citing in excess of 10,000 creditors across the 25 estates.

The debtors' professionals — Sherrard Roe Voigt & Harbison, PLC (counsel) and Cards Consulting, LLC (financial consultant) — were approved by agreed order on March 12, 2026, with Truist Bank reserving its right to challenge compensation at the fee application stage.

Relief from Stay Disputes

The chapter 7 phase has been marked by a wave of motions for relief from the automatic stay filed by equipment lessors and secured lenders.

Resolved by stipulation: IPFS Corporation obtained stay relief by stipulation and agreed order on March 27, 2026, authorizing IPFS to exercise its power of attorney to cancel the debtors' insurance coverage and collect unearned premiums as collateral. The trustee retained a 90-day challenge period to contest the validity of IPFS's liens, and any excess proceeds beyond the outstanding debt must be returned to the trustee. Truist Bank also filed a motion for entry of stipulation and agreed order granting stay relief on March 20, 2026.

Trustee objections pending: The trustee objected to relief from stay motions filed by Fleet Equipment Leasing, Navistar Leasing Company, and BMO Bank N.A., with hearings scheduled for April 22, 2026. The trustee's objections suggest the trustee sees potential recovery value in preserving the equipment for the estates rather than allowing immediate repossession.

Preliminary hearings were set for March 25, 2026, on motions filed by First Horizon Bank, Banc of America Leasing & Capital, and Pinnacle Bank.

Key Timeline

The timeline below reconstructs the prepetition default cascade and the post-petition conversion sequence from the Pinnacle Bank stay relief motion, the agreed conversion order, and the trustee's subsequent professional retention applications.

Date	Event
June 2025	Paladin ceases equipment payments to lenders
June 15, 2025	Quickway Transportation shuts down Murfreesboro, TN facility; 45 layoffs
October 21, 2025	Pinnacle Bank issues default notice following Truist cross-default
November 2025	Paladin retains Cards Consulting for out-of-court restructuring
January 16, 2026	Truist Bank issues notice of forbearance default
January 21, 2026	BMO issues default notice seeking equipment return
January 23, 2026	BMO declines Paladin's proposed weekly payment program
January 26, 2026	25 entities file chapter 11 petitions (M.D. Tenn.)
February 5, 2026	DIP financing through Truist approved for $1.5 million payroll
February 18, 2026	Agreed order converting all cases to chapter 7; Jeanne Ann Burton appointed trustee
March 12, 2026	Debtors' professional retentions approved; Newpoint Advisors application filed
March 20, 2026	Truist Bank agreed stay relief motion filed
March 27, 2026	IPFS Corporation stay relief granted by stipulation
April 9, 2026	Continued meeting of creditors (scheduled)
April 22, 2026	Final hearings on Fleet Equipment/Navistar/BMO stay relief motions (scheduled)

Frequently Asked Questions

Why did Paladin Capital file chapter 11?

Paladin cited prolonged freight market weakness, reduced demand, falling spot rates, and rising insurance and equipment costs. The company defaulted under a Truist Bank credit facility after insurers drew on letters of credit tied to accident claims. Cross-default provisions cascaded the default across equipment leases with multiple lenders, and Paladin had been unable to make equipment payments since June 2025.

Why did the cases convert to chapter 7 so quickly?

The 25 cases converted from chapter 11 to chapter 7 by agreed order on February 18, 2026, just 23 days after the petition date. No section 363 sale process launched and no plan of reorganization was filed. The agreed nature of the conversion indicates that both the debtors and key creditors concluded that reorganization was not feasible and orderly liquidation was the appropriate path.

What companies did Paladin Capital own?

Paladin's portfolio comprised 25 affiliated entities including the Quickway family of companies (Nashville-area trucking and logistics), Robert Bearden, Inc. (Southeast regional carrier, Cairo, Georgia), Magnum Express and Magnum Logistics, Volunteer Express, Dolphin Line, SNL Distributing Services, Central Logistics, and Capital City Leasing. All operating entities were ESOP entities, and the group employed approximately 912 workers.

What is the status of the chapter 7 liquidation?

Trustee Jeanne Ann Burton retained Thompson Burton PLLC as counsel, Newpoint Advisors as financial advisor, and Stretto as claims and noticing agent. The trustee is actively contesting relief from stay motions filed by equipment lessors. Hearings on pending stay relief disputes are scheduled for April 22, 2026.

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