Celadon files for Chapter 11 bankruptcy
Celadon Group, one of the largest North American truckload freight carriers, is filing for Chapter 11 bankruptcy protection. The filing has been speculated about following an announcement last week that two more former executives were indicted for securities fraud.
According to a Chapter 11 bankruptcy petition filed in U.S. District Court in Delaware, the board of Celadon International Corp. voted Sunday, Dec. 8, to seek bankruptcy protection. The filing includes a total of 26 companies under the Celadon umbrella.
Celadon Group lists total assets of approximately $427 million, and total debts of $391 million, owed to between 5,000 and 10,000 creditors, according to the court filing. The company claims it has approximately 3,800 employees, including approximately 2,500 truckers.
At the top of the list of the company’s creditors is the U.S. Department of Justice, with a $33 million litigation claim. The bankruptcy filing also lists a $2.8 million obligation to Comdata Corp. and a $2.5 million obligation to Pilot Travel Centers as part of its 50 largest creditors.
As part of the bankruptcy filing, Celadon also filed a motion seeking to pay wages and compensation for employee compensation. In that filing, the company estimates it has more than $4.4 million in unpaid compensation to workers and independent contractors, and another $1 million in obligations to its “termination bonus program” which they say will “incentivize the driver employees and independent contractors” into completing the truckload trips in progress and returning the company’s equipment to its designated areas.
The company is asking for the court to direct banks and Comdata to “receive, process, honor and pay all of the Debtors’ prepetition checks and fund transfers” as well as prohibit those parties from placing any holds on, or attempting to reverse any of the transfers to the employees.
Celadon Group provides a variety of freight operations, including long haul, regional, and expedited freight service across the U.S., Canada and Mexico. As of Monday morning, there was still no announcement of the company’s bankruptcy filing on its website.
Amid rumors this weekend that the company was about to file for bankruptcy, drivers on social media began reaching out to each other for support.
Teddy’s Trucker’s Association, a nonprofit aimed at improving the lives of truckers and their families, started the Celadon Closure Assistance and Jobs Facebook group to help drivers.
“It just brings tears to my eyes how many people are supporting the drivers,” said Bridgette Reinsmith, an administrator for the Facebook group. “Tons of people are losing their jobs through no fault of their own.”
Reinsmith said individuals and companies have reached out to help drivers get back home or find a new job.
The companies in the Celadon Group bankruptcy:
- Celadon Group Inc.
- AR Management Service Inc.
- Bee Line Inc.
- Celadon Canadian Holdings Ltd.
- Celadon E-Commerce Inc.
- Celadon International Corp.
- Celadon Logistics Services Inc.
- Celadon Mexicana SA de CV.
- Celadon Realty LLC
- Celadon Trucking Services Inc.
- Distribution Inc.
- Eagle Logistics Services Inc.
- Hyndman Transport Ltd.
- Jaguar Logistics SA de CV.
- Leasing Servicios SA de CV.
- Osborn Transportation Inc.
- Quality Cos. LLC
- Quality Equipment Leasing LLC
- Quality Insurance LLC
- Servicios Corporativos Jaguar SC.
- Servicios de Transportación Jaguar SA de CV.
- Stinger Logistics Inc.
- Strategic Leasing Inc.
- Taylor Express Inc.
- Transportation Insurance Services Risk Retention Group Inc.
- Vorbas LL
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