A group of Celadon Group Inc. investors have agreed to a $5.5 million settlement in a class action suit against the trucking company as it faces government investigations over financial reporting discrepancies.
For the past few years, Indianapolis-based Celadon, one of the nation’s largest trucking companies, has faced numerous lawsuits brought on after the company revealed to shareholders that its actual profits were likely hundreds of millions of dollars less than previous financial documents indicated. Celadon also announced in October of 2017 that it is under investigation by the Securities and Exchange Commission (SEC) because of these financial reporting errors.
A class of investors who purchased Celadon stock between 2013 and 2018 are now waiting for approval of the multi-million dollar settlement by a federal judge in New York. If approved, Celadon’s insurer will pay out the $5.5. million into a fund that would then be distributed among class members.
The class action members reportedly agreed to the settlement because they believed that taking Celadon to trial could harm their chances of recovering lost funds. According to the Indiana Business Journal, the plantiffs believe that “there appears to be significant risk that the company will go bankrupt.”
Since Celadon admitted to being under investigation by the SEC, the company sold off their flatbed division, downsized their fleet, closed their three Celadon Driving Academy locations, and changed many company executives. They have also attempted to maximize profitability by relying less on owner-operators and more on company drivers.