On Monday morning, Indiana-based trucking company Celadon Group Inc. ended the speculation that had been swirling all weekend when they confirmed to their thousands of truck drivers that they would be shuttering their operations permanently.
Shortly after midnight on Monday, December 9, Celadon officially filed for Chapter 11 bankruptcy protection and announced that they are immediately shutting down their operations.
The Indianapolis Star reports that 4,000 Celadon workers will be laid off, including thousands of truck drivers.
Celadon says that the shut down “does not include the Taylor Express business headquartered in Hope Mills, North Carolina, which will continue to operate in the ordinary course while the Company’s explores a going concern sale of its operations.”
Celadon made the official announcement to their drivers on Monday morning via Qualcomm:
The message reads, “We regret to inform everyone that Celadon Group Inc. has filed for Chapter 11 bankruptcy. We will continue to haul and deliver all the load we 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 moving forward. Celadon Management.”
A number of Celadon employees reached out to CDLLife to react to the heartbreaking news that they would be losing their jobs just weeks before Christmas, calling the mass layoffs “devastating” and asking for prayers. Others praised Celadon for their efforts to get their drivers home and not leave them stranded. Some reported that their fuel cards were not working for a period of time over the weekend.
For more on the trucking industry reaction to the Celadon closure news, please click here.
Paul Svindland, Chief Executive Officer of Celadon, explained the decision to shutter the company after decades in operation:
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. 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.
The bankruptcy and closure news comes just days after the Department of Justice (DOJ) announced that two former executive officers with Celadon would face charges related to fraud and lying to investors. Earlier this year, Celadon agreed to pay $42.2 million in restitution to shareholders for “filing materially false and misleading statements to investors and falsifying books, records and accounts.”
Celadon was founded in 1985 and was the largest provider of international truckload services in North America, operating 3,300 tractors and 10,000 trailers at the time of the bankruptcy.