This week marked a significant event in the trucking industry with the bankruptcy of Celadon Group Inc., based in Indianapolis. The company filed for bankruptcy on December 8 and announced its closure.
Paul Svindland, Celadon’s CEO, stated, “We have thoroughly considered every option to restructure Celadon and continue operations, but various legacy issues and market challenges made it unfeasible.”
Speculations about the bankruptcy began on Friday night when FreightWaves, a trucking news outlet, reported that Celadon was preparing to file for Chapter 11. Sources informed Business Insider that many Celadon drivers had their fuel cards deactivated, leading to concerns of being stranded.
In Indianapolis, approximately 1,300 employees at Celadon’s headquarters learned about how the bankruptcy would affect them and their families.
According to a letter obtained by Business Insider, Celadon employees were informed that:
- Their paychecks would include earnings up through December 7.
- They are eligible for unemployment benefits.
- Unused vacation payouts will not be given.
- As of midnight on December 8, they would lose medical, dental, and vision insurance a day before learning of their layoffs.
- Employees should apply for health coverage under the federal COBRA program to maintain insurance.
Moreover, Celadon did not adhere to the WARN Act, which mandates companies notify employees 60 days in advance of large layoffs or closures. However, Celadon may assert that unexpected business circumstances justified the lack of notification.
Recently, the Securities and Exchange Commission charged two former executives from Celadon linked to a multiyear accounting scandal. Following this news, Celadon’s stock fell drastically to $0.41 per share, a stark decline from over $20 per share in 2015, before the accounting issues became public. As of Monday, shares were valued at $0.03.
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If you are employed by Celadon or have engaged their shipping services, please reach out to rpremack@businessinsider.com.
Learn More About the 2019 Trucking Recession:
America’s leading truck-engine manufacturer recently announced 2,000 layoffs, signaling a severe downturn in the $800 billion trucking industry.
Truck drivers are increasingly concerned about the US economy’s trajectory.
Many truckers struggling to pay fuel cards highlight a looming wave of additional bankruptcies.
Concerns among truckers about their business sustainability are at recession-level highs.
There are reports that Amazon’s new logistics strategies are relying on unreasonably low rates, leading some truckers to refuse service.
The primary association for truck drivers has indicated that the trucking sector is facing a potential crisis.
