IT’S OFFICIAL: Celadon Group Announces Closure Leaving Thousands Without Jobs
Indianapolis, IN – Shortly after midnight on Monday, December 9, Celadon Group formally announced it has filed bankruptcy in U.S. Bankruptcy Court for the District of Delaware and will be ceasing all operations.
Paul Svindland, Celadon’s chief executive officer (CEO), said, “We have diligently explored all possible options to restructure Celadon and keep business operations ongoing, however, a number of legacy and market headwinds made this impossible to achieve.”
Transportation Nation Network (TNN) was the first and only news outlet in the world to accurately report the mega carrier would be filing for Chapter 11 protections “as close to midnight as possible” on Sunday, December 8, and cease operations the following day.
Last week, TNN first reported Celadon began notifying customers on Thursday, December 5 the company would soon be filing bankruptcy and no longer be servicing accounts.
In Monday’s official announcement, Celadon confirmed it will shut down almost all of its business operations effective today.
However, the company says the shut down does not include the Taylor Express business headquartered in Hope Mills, NC.
Celadon will continue to operate in the ordinary course while the parties “explores a going concern sale of its operations.”
Svindland explained the company’s failure by saying, “Celadon has faced significant costs associated with a multi-year investigation into the actions of former management, including the restatement of financial statements. When combined with the enormous challenges in the industry, and our significant debt obligations, Celadon was unable to address our significant liquidity constraints through asset sales or other restructuring strategies. Therefore, in conjunction with our lenders, we concluded that Celadon had no choice but to cease all operations and proceed with the orderly and safe wind down of our operations through the Chapter 11 process.”
To support the wind down of operations, Celadon’s lenders have agreed to provide incremental debtor-in-possession financing, the company said.
At the date of its shutdown, Celadon says it was operating a fleet of approximately 3,300 tractors and 10,000 trailers with nearly 4,000 employees.
However, a source with direct knowledge tells TNN the latest driver count is approximately 1,800.
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Celadon broke the news to drivers via in-cab communications shortly after midnight on Monday morning, as TNN reported it would.
In a “fleetwide message,” the company sought to assure drivers that those who “follows instructions will be paid for the work and miles assigned and completed and will not leave anyone stranded away from home.”
The full message reads:
We regret to inform everyone that Celadon Group, Inc. has filed for a Chapter 11 bankruptcy.
We will continue to haul and deliver all loads that we now have in transit.
We will have more information in the morning as to where equipment needs to be returned to.
We have been assured that everyone who follows instructions will be paid for the work and miles assigned and completed, and Celadon will not leave anyone stranded away from home.
Finally, we truly appreciate your commitment and dedication to this company, and wish you all luck forward.
However, TNN has received multiple reports from Celadon drivers indicating their fuel cards are no longer functional.
Further, the company is asking trucks be returned to a Celadon terminal or to Chattanooga, TN-based Transport Enterprise Leasing (TEL), which provided company trucks, as well as trucks for Celadon’s lease purchase program.
One driver who has already returned his truck told TNN that TEL is offering $500 for safe delivery of the trucks.
ALSO BREAKING NOW
As the news of Celadon’s impending closure broke over the weekend, many in the trucking community began to rally in anticipation that hundreds of drivers could be left stranded.
TNN’s Facebook page and inbox was flooded with people who offered rides and assistance to drivers who might find themselves many miles away from home.
Facebook groups such as “Celadon Closure Assistance and Jobs” began organizing to offer a helping hand.
Dozens of carriers made announcements offering support to disaffected Celadon drivers.
One fellow mega carrier even offered bus tickets home for Celadon drivers who found themselves stranded.
Largest Truckload Carrier Bankruptcy in History
Celadon’s bankruptcy is the largest truckload carrier failing in U.S. history.
At it’s peak, the Indianapolis, IN-based carrier was one of the top 10 largest in the U.S.
It offered point-to-point shipping, warehousing, supply chain logistics, tractor leasing and other transportation and logistics services and, specifically, to provide long haul, regional, local, dedicated, intermodal, temperature-protect, and expedited freight services across the U.S., Canada and Mexico.
With over 150,000 border crossings annually, Celadon was the largest provider of international truckload services in North America.
However, following the passing of trucking legend and founder of Celadon, Steve Russell, in April of 2016, top company executives soon found themselves at the center of a criminal investigation by the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) relating to the company’s filing of fraudulent financial statements dating back to fiscal year 2016.
Three former Celadon executives, William Eric Meek, 39; Bobby Lee Peavler, 40; and Danny Williams, 36; have been arrested and charged with multiple crimes in connection to what DOJ officials called a “complex securities and accounting fraud scheme that resulted in a loss of more than $60 million in shareholder value.”
In April of this year, Celadon announced it had reached a settlement with the DOJ and SEC and agreed to pay restitution in the amount of $42,245,302.
However, the scandal led to plummeting investor confidence and a collapse of its stock from in the mid-$20 per share range in 2015, all the way down to 41 cents a share last Friday.
TNN has spoken with multiple former high ranking Celadon executives about what it was like in the final months leading to the company’s closure.
You can read more of what these Celadon insiders had to say HERE.
Stay logged on to TransportationNation.com for much more breakdown and analysis of this developing story and what it will mean for the trucking industry.
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Get more news on recent trucking company closures HERE.