Fluid Market Inc., the Denver-based operator of a peer-to-peer truck-sharing platform, has asked a Delaware bankruptcy court to convert its Chapter 11 case to a Chapter 7 liquidation, citing the infeasibility of a restructuring plan and insufficient cash to fund further operations.
The company, which managed nearly 5,500 vehicles through its technology platform, filed the conversion motion on August 8, 2025, in the U.S. Bankruptcy Court for the District of Delaware. The motion comes nearly 10 months after Fluid Market and its affiliate Fluid Fleet Services, LLC initially sought Chapter 11 protection on October 16, 2024, following failed efforts to raise additional capital or debt financing.
"The Debtors have determined that a plan of liquidation in these chapter 11 cases is not feasible in light of the Debtors' estimate of administrative and priority claims, the value of their remaining assets, the limited prospect of future recoveries to the estates, and the lack of cash to fund a further wind down," the company stated in its motion.
Global Settlement Resolves Multiple Disputes, Enables Asset Sale
The path to conversion was cleared by a comprehensive global settlement reached between multiple parties in the case, including the debtors, the official committee of unsecured creditors, the company's postpetition lenders (DIP Lenders), and asset purchaser Kingbee Rentals, LLC. The settlement was crucial in resolving what had become a contentious reorganization process.
Initially, the unsecured creditors committee had objected to the proposed asset sale and filed an emergency motion to extend the challenge period for potential claims against the transaction. These disputes threatened to derail the sale process and further drain the company's limited resources through protracted litigation.
The global settlement, whose principal terms were stated on the record during the December 13, 2024 sale hearing and approved by the court, accomplished several key objectives that allowed the case to proceed in an orderly fashion.
Most significantly, the settlement carved out approximately $3.9 million in what the parties termed "Segregated Funds" from the assets being sold to Kingbee. These funds, consisting of vehicle sale proceeds and damage claim proceeds or insurance claim proceeds, belonged to the vehicle owners (known as FVIPs or Fluid Vehicle Investment Partners) who had placed their trucks on the company's sharing platform.
"The Global Settlement paved the way for approval of the Sale and resolved the Challenge Motion," the company explained in its filing, noting that the agreement enabled all parties to move forward without the risks and costs of extensive litigation.
Complex Reconciliation Process Required
Under the global settlement terms, Fluid Market was required to undertake a detailed analysis and reconciliation of the competing interests in the Segregated Funds. The process involved multiple steps designed to ensure transparency and creditor input:
The debtors had to analyze and reconcile all competing claims to the $3.9 million in segregated funds, then share their reconciliation analysis with the creditors committee for review and comment. Following this collaborative review, the company was required to propose a specific methodology for distributing the funds to their rightful owners and file formal motions seeking court approval of both the reconciliation and distribution methodology.
Importantly, the settlement included a practical limitation: the debtors were "not required to risk administrative insolvency or engage in extensive litigation in prosecuting the Reconciliation Motion." This provision recognized the company's limited resources and prevented the reconciliation process from consuming funds needed for basic case administration.
The reconciliation process extended over several months, with the company filing its initial reconciliation motion on May 29, 2025, and a supplemental motion on July 3, 2025. Court orders approving these motions were entered on June 23, 2025, and July 17, 2025, respectively.
Asset Sale Completed with Limited Interest
The settlement enabled the completion of the asset sale to Kingbee Rentals, LLC, which closed on December 20, 2024. The sale process, however, revealed limited market interest in the assets, with Kingbee being the only qualified bidder despite marketing efforts under court-approved bidding procedures.
Following the sale closing, the parties entered into a Transition Services Agreement (TSA) under which Kingbee agreed to provide information to help vehicle owners locate their trucks and understand any outstanding vendor repair claims. This arrangement was particularly important given the scattered nature of the nearly 5,500 vehicles that had been part of the platform.
The global settlement preserved Kingbee's rights to receive proceeds that were properly included as "Purchased Assets" while protecting the interests of vehicle owners in funds that belonged to them.
Planned Conversion Completes Settlement Framework
The global settlement explicitly contemplated that the debtors would file the conversion motion "promptly after they filed the Reconciliation Motion." With the reconciliation motions now filed and approved, and the distribution process underway, the company argues that the time has come to complete the final phase of the settlement by converting to Chapter 7.
"With the Reconciliation Motions now filed, and the Reconciliation Orders entered, the time has come for these cases to be converted to chapter 7 and allow a chapter 7 trustee to pursue any estate causes of action and complete the Debtors' wind-down process," the company stated.
Legal Path Forward
Under Section 1112(a) of the Bankruptcy Code, the company has an absolute right to convert from Chapter 11 to Chapter 7, as none of the statutory exceptions apply. The debtors remain in possession of their assets, the case was commenced voluntarily, and it was not previously converted from another chapter of the bankruptcy code.
The conversion will become effective 14 days after the court enters its order. All estate professionals are expected to file final fee applications before the conversion, with the debtors planning to pay these fees prior to turning the case over to a Chapter 7 trustee.
The case, numbered 24-12363 (CTG), is being heard by Chief Judge Craig T. Goldblatt in the Delaware bankruptcy court. The debtors are represented by Pachulski Stang Ziehl & Jones LLP, with Laura Davis Jones, David M. Bertenthal, and Timothy P. Cairns serving as counsel.
An objection deadline of August 22, 2025, at 4:00 p.m. Eastern Time has been set, with a hearing scheduled for September 5, 2025, at 3:00 p.m. Eastern Time. Once converted, a Chapter 7 trustee will be appointed to pursue any remaining estate causes of action and complete the company's wind-down process.
This article was prepared using Stretto Conductor, our new AI-powered assistant that's here to help. Stretto Conductor was able to create this summary of a 10 page court filing in less than a minute. Always review the underlying docket filings for accurate information. The information and responses generated by Stretto Conductor may contain errors or inaccuracies and should not be relied upon as a substitute for professional or legal advice.