Celadon ceases operations; 4,000 employees to lose jobs

Scott Riley, a company driver for Celadon, drove on Monday morning from his home in Anderson, Ind., to the Celadon terminal in Indianapolis to turn in his keys. Like thousands of others, Riley’s employment with the trucking giant is ending.

Celadon on Monday, Dec. 9, filed for Chapter 11 bankruptcy and announced that it “will shut down all of its business operations effective as of today.”

Company statements

“We have diligently explored all possible options to restructure Celadon and keep business operations going, however, a number of legacy and market headwinds made this impossible to achieve,” Celadon CEO Paul Svindland said in a news release. “Celadon has faced significant costs associated with a multiyear 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.”

According to Celadon, the company had a total of 4,000 employees, 3,300 tractors and 10,000 trailers.

Celadon driver reaction

About 12:30 a.m. Monday, Riley said the drivers received a Qualcomm message that notified them that the company was going to close.

“Fleetwide message: We regret to inform everyone that Celadon Group Inc. has filed for a Chapter 11 bankruptcy,” the Qualcomm message stated. “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. 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.”

Before the message, Riley said he had been told nothing official from a company but that a supervisor had referred him to two other companies for being one of Celadon’s “top drivers.”

When he arrived with the truck on Monday, Riley said there was a skeleton crew and about 40 to 50 drivers waiting to receive bus tickets home.

“There were no incidents,” Riley said. “The police was there for security purposes. I took the keys to a supervisor, and he apologized for what happened. He said good luck and that he would work until Wednesday and then he also would be done.”

The bankruptcy filing and closure come days after two more Celadon executives were indicted for their alleged role in a fraud scheme worth tens of millions of dollars.

The fallout

Riley is one of about 4,000 employees to lose their job just weeks before Christmas.

“Being around Christmas makes it difficult,” he said. “When a driver chooses to leave, he’s already got everything set up. But when a company shuts down, they just lost all of their medical benefits, all of their seniority, and there’s no guarantee in writing that they’re ever going to get that last paycheck. They owe me over $1,000 in pay alone.

Riley said he has received two job offers from trucking companies already and will make a choice soon. However, he said he is likely to have to go through a 60-to-90-day probationary period before he will be able to join the new company’s medical insurance.

“Now, for the 60 to 90 days, I have no insurance. My wife has no insurance. I have a $1,400 per month medication that I take every day. My wife has a $450 a month inhaler that she takes every day. There are 4,000 (employees) out there that are going through the exact same thing I’m going through. It’s detrimental to everybody. Their families, their children, Christmas.”

Celadon was founded in 1985 and was one of the first U.S.-based trucking companies to take trailers into Mexico. According to the Celadon news release, the company was the largest provider of international truckload services in North America with more than 150,000 border crossings annually.