(Bloomberg) -- A judge approved adding independent directors to Kal Freight Inc.’s board and other corporate governance changes after the bankrupt trucking firm was accused of double-pledging its trucks as collateral to obtain financing from US and Canadian lenders.

Most Read from Bloomberg

• Hong Kong's Expat Party Hub Reshaped by Chinese Influx

• Brace for a Nationwide Shuffle of Corporate Headquarters

• American Institute of Architects CEO Resigns

• City Hall Is Hiring

• Cloud Computing Tax Threatens Chicago’s Silicon Valley Dream

Judge Christopher Lopez said Wednesday he’d approve appointing Robert H. Warshauer and John Young Jr. as directors as well as other measures meant to limit the influence of the trucking company’s owner, Kalvinder Singh. The request was granted days after Kal Freight filed Chapter 11 with nearly $325 million in long-term debt.

Kal Freight’s lenders and former business partners have accused the firm of malfeasance. In a California lawsuit earlier this year, two former business partners claimed Kal Freight duplicated vehicle identification numbers on trucks and trailers that had already been used as collateral on loans to secure additional financing.

Vehicle finance lender Daimler Truck Financial Services USA claimed Kal Freight “perpetrated a massive fraud” on creditors, according to court papers. The lender has alleged Kal Freight transferred trucks and trailers included in Daimler’s collateral and sold those units to third-parties, free and clear of its liens.

“We cannot comment on any of the allegations other than they are baseless,” an attorney for Singh, Mandeep Rupal, said Thursday.

Kal Freight Chief Restructuring Officer Bradley Sharp, who was engaged by the company in September, testified Wednesday that Singh didn’t oppose adding the directors or restrictions on his ability to remove them from the board.

In an earlier court filing, Sharp said Kal Freight has been subject to various allegations of inappropriate accounting practices and claims that personnel improperly moved trucks and trailers from the US to Canada and improperly titled its vehicles. The company has said it intends to use Chapter 11 “to transparently restructure” Kal Freight and wind down some of its businesses, according to court documents.

The case is Kal Freight Inc., number 24-90614, in the US Bankruptcy Court for the Southern District of Texas.

(Updates to include statement from Singh’s attorney in fifth paragraph.)

Most Read from Bloomberg Businessweek

• Market-Moving Data Under Threat as Trump Returns to Washington

• Biden Made This Billionaire Much Richer. The Bonanza Could End With Trump

• Medical Spas Push the Boundaries of Medical Care by Non-Doctors

• Grand Theft Auto VI Will Rule the Video Game Industry in 2025

• Early Adopters Are Ditching Google Search for AI Chatbots

©2024 Bloomberg L.P.