Fluid Truck Files for Bankruptcy: Denver Startup Seeks Buyer Amid Financial Turmoil

Fluid Truck Files for Bankruptcy, Seeks Buyer Amid Financial Turmoil

Fluid Truck, the Denver-based commercial vehicle rental startup, has filed for Chapter 11 bankruptcy protection following a series of financial setbacks and legal challenges. The company, once hailed as the “Zipcar of commercial vehicles,” has laid off 30% of its staff and ousted its sibling co-founders, James Eberhard and Jenifer Snyder, from executive positions.

The bankruptcy filing comes as Fluid Truck faces mounting losses and multiple lawsuits, including a class action in Colorado. The company reportedly owes $12 million to members of its Fluid Vehicle Investor Program (FVIP) and $26 million to vendors, with an estimated 5,500 creditors awaiting payment. In 2023 alone, Fluid Truck reported cash losses of $20.6 million.

Founded in 2016, Fluid Truck had raised over $80 million in venture funds and expanded its operations to 400 cities across 32 states. However, financial mismanagement and conflicts with minority shareholders Bison Capital and Ingka Investments led to the company’s current predicament.

Scott Avila from Paladin Management has been appointed as Eberhard’s replacement, tasked with navigating the company through its restructuring process. Initially exploring liquidation options, the company’s focus shifted towards a potential sale after receiving a large payment from a customer.

Kingbee Rentals has emerged as a potential buyer, though it reportedly lacks the funds to acquire all of Fluid Truck’s assets. To maintain operations and facilitate the restructuring and sale process, Fluid Truck has sought and received court approval for a $7 million debtor-in-possession (DIP) loan on an interim basis. The loan approval comes with conditions, including the completion of the sale by December 31.

The future remains uncertain for Fluid Truck’s creditors, particularly unsecured lenders such as FVIP members. Industry experts suggest that recovery prospects for unsecured creditors are grim, given the company’s financial state.

As the bankruptcy proceedings unfold, stakeholders await further developments on the potential sale and its implications for the company’s future. Fluid Truck has not immediately responded to requests for comment on the situation.