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Dunham Express abruptly shuts down operations

A once-thriving delivery company, which at one time had a fleet of 230 vehicles and 11 warehouse locations serving a six-state market, has closed its doors.

Dunham Express, which was founded in Madison in 1951 and had a facility in Duluth, ceased operations on Feb. 10. What led to the company's fall is not known, but in an order establishing a receivership and appointing a receiver filed in Minneapolis on Jan. 18, it's revealed the company owed nearly $8 million to lenders and creditors it was unable to pay.

James McTevia, whose company — Michigan-based turnaround management firm McTevia & Associates — was appointed by the court to serve as the receiver, said it didn't take long to determine Dunham Express could not be saved. He wouldn't elaborate on what led to the company's financial demise.

"The company was in very poor financial condition," McTevia said. "When I was appointed as receiver, I went in for a few days, took a look at everything and concluded, if the company were to continue operating, the creditors would get in worse shape, the employees would get in worse shape and the independent contractors were getting in worse shape."

Dunham Express was out of money.

"It was a no-brainer to stop operating and just shut everything down," McTevia said.

On Friday, Dunham Express' website still was operating, although attempts to contact the company through the website resulted in an automated email reply noting the company was no longer in business.

McTevia said the shutdown happened so rapidly there wasn't time to inform Dunham's customers or file layoff notices with state workforce offices in Minnesota, where the company was headquartered, or in Wisconsin where it had a major presence. The company, which employed about 200 people, had operations in Minnesota, Wisconsin, Illinois and Indiana and also served clients in Iowa and Michigan's Upper Peninsula.

John Dipko, spokesman for the Wisconsin Department of Workforce Development, said his office had not received any notification from Dunham Express and said he hoped affected workers would use the state's job-seeking resources.

Shane Delaney, spokesman for the Minnesota Department of Employment and Economic Development, said his office also has not received any notification of Dunham Express' closure. Though he's only been with his department a few months, Delaney said he is unaware of a situation where his office did not know about a business closure or layoff.

"When we do hear about a possible layoff or closure either through the employer themselves or via a media report, we immediately start looking into it to see if there's any validity to it," Delaney said. "We just want to make sure impacted employees know how to access the resources they need to find work."

McTevia said he wished the company could have stayed opened long enough to give everyone affected time either to secure other jobs or find other delivery services.

"(Dunham was) out of money," he said. "We couldn't meet payroll, we couldn't pay our utilities."

The receiver notice was filed by Spectrum Commercial Services of Bloomington, Minn., which was owed nearly $2 million by Dunham, according to the court filing. Other defendants named in the filing included some of Dunham's creditors and lenders including Western Bank of St. Paul, Minnesota, which was owed just over $1 million, and ExMarq Capital Partners of Minnetonka, Minnesota, owed in excess of $5 million.

Any equipment or assets held by Dunham were seized and any proceeds will be sent to the secured creditors. Spectrum also is working to collect any of Dunham's remaining open invoices.

McTevia said it's unlikely all the debt owed by Dunham Express will be repaid.

"The company is gone, the creditors will never be paid and I assume by now, customers have found other delivery places," he said. "That's what happens when a company is done."

Dunham Express enjoyed more prosperous times.

The company reported revenues of $22.5 million in 2003. A 1997 Wisconsin State Journal article reported the company employed about 350 people and operated a fleet of 230 vehicles.

The company found its niche making same-day and next-day deliveries to points around Wisconsin and neighboring states. It was started in 1951 by Art Dunham, who operated the business until 1984 until he sold it to Jon DiPiazza, who was president of the company at that time.

DiPiazza owned the business until 1997, when he sold it to Mark McDonald and Mark Helmke. McDonald and Helmke in September 2012 sold the business to a holding company, Passe Inc. of St. Paul, which was formed by Scott Passe, who was Dunham's chief operating officer when he joined the business in 2005.

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