Kam-Way sued for $2.3 million loan default

M&T Bank has filed a lawsuit against Kam-Way Transportation in federal court seeking to recover more than $2.3 million in equipment loans from the Blaine-based transportation company.

The East Coast bank filed the lawsuit May 28 in the U.S. District Court for the District of Connecticut against nine businesses associated with Kam-Way as well as company owners Harneet and Kamaljit Sihota, who are personally liable for the debts. The companies named in the suit include Kam-Way, Kam-Way-acquired Produce Supply Express and five other companies whose addresses are listed as 215 Marine Drive, the same address as Kam-Way.

Federal court records show Kam-Way had been borrowing from M&T Bank since at least March 2015. In 2022, the transportation company entered into three master loan agreements with the bank that totaled $6.1 million. The loans had five- to six-year repayment plans.

The first of the three loan agreements was signed in January 2022, allowing Kam-Way the financing to purchase 50 new utility trailers valued at $2.52 million. In April 2022, Kam-Way received financing to purchase 30 new trailers and 30 trailer refrigeration systems for a total value of $3 million. Also in April 2022, Rees Enterprizes, a Sumner, WA-based transportation company that Kam-Way acquired, received a loan to purchase eight new trailers for $598,928.

In August 2022, Kam-Way announced that it had acquired Produce Supply Express, Inc., a Spokane-based trucking company. In that announcement, Kam-Way said it had 510 trailers, 226 tractors and 325 employees.

In April 2024, the guarantors, all associated with Kam-Way, were added in the loan agreement. Around this time, the lawsuit states that Kam-Way failed to make its monthly payments and defaulted, which led to M&T Bank issuing a default notice last June. In July, M&T Bank entered a forbearance agreement and Kam-Way failed to make those scheduled payments, according to the lawsuit.

M&T Bank has moved to sell the equipment to recover Kam-Way’s current outstanding balance of $2.34 million. The bank is also seeking interest, attorney fees and accruing expenses from Kam-Way.

The Kam-Way building, at 215 Marine Drive, has been on the market since March 2024, according to Coldwell Banker Homes. It’s being listed for nearly $2.5 million.

Asked to comment on the lawsuit, Kamaljit Sihota told The Northern Light that the lawsuit had been dropped and asked the newspaper to not report on the subject. When asked for proof about the case being withdrawn, Sihota wrote, “It’s in process.” As of June 4, the lawsuit shows as active on the District of Connecticut legal register.

Since its founding in 2008, Kam-Way has grown to provide transportation services across the Western U.S. and B.C. In addition to its Blaine headquarters, it operates branch terminals in Sumner, Spokane, Surrey, and three locations in California.