Celadon files for Chapter 11 bankruptcy, ceases all operations
INDIANAPOLIS, Ind. — One of America’s biggest trucking firms, Indianapolis-based Celadon, filed for Chapter 11 bankruptcy early Monday morning. They shut down all business operations, which affects all 4,000 employees.
This comes after the company was rocked last week when the U.S. Attorney for the Southern District of Indiana Josh Minkler announced two top former executives, former chief operating officer William Eric Meek and former chief financial officer Bobby Lee Peavler, face federal fraud charges in connection with a scheme that robbed shareholders of $60 million of stock value.
Federal authorities charge the pair concealed tens of millions of dollars in losses from banks, shareholders and investors while inflating the value of Celadon’s truck fleet in the years leading up to 2016.
Paul Svindland, Chief Executive Officer of Celadon, said, “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.”
Celadon operates nearly 2,700 trucks traveling north/south routes from Mexico to Canada from a terminal in the 9500 block of East 33rd Street near Post Road.
Throughout Sunday afternoon, Celadon trucks and trailers pulled through the gates of the terminal yard as one driver told CBS4 he had never seen so many rigs parked at the company’s headquarters.
“They haven’t officially said anything to us,” said one driver, who was afraid to be identified as she was dependent on Celadon to make arrangements for her return home. “There’s probably about 30 drivers, 20-30 drivers here at the terminal where some of them parked their trucks.
“Some people have already quit Celadon worried about money.”
The driver was told Celadon officials will advise employees of their options Monday, leaving supporters like industry veteran Latasha Tillman to scour the internet and Facebook for information.
“It has been numerous posts of people saying, ‘Hey, look, I’m stuck here in St. Louis,’ ‘I’m stuck here in Kansas,’ ‘I’m stuck here in Baltimore,’ ‘I called the job, no one’s answering, my fuel card is still not working,’ ‘If you can give me a lift to get me back home, that would be well appreciated.’”
Tillman said she spotted recruiters for other trucking firms on the Celadon lot offering jobs and assistance to drivers.
“I’ve had some drivers that I’ve read post on social media that, ‘Don’t go anywhere, just hang tight, just deliver the load,’” she said. “The drivers are not for sure if they’re gonna have a job next week. It’s like the holidays are coming up, everyone has family, and they get hit with this huge information on whether, ‘Am I gonna have somewhere to go?’”
“People are stranded. There are people that are broke down on the side of the road,” said the driver who wouldn’t be identified for fear of angering Celadon management. “Some of them didn’t have enough gas, some of them were told that they could put gas in out of their own pocket.”
Celadon was already laboring under a $42 million restitution payout to the federal government after an executive of a subsidiary pleaded guilty in April to fraud charges.