Dec. 5th, 2019- The Securities and Exchange Commission today charged two former top executives of Indiana-based trucking company Celadon Group Inc. for their participation in an accounting fraud that inflated the company’s income and earnings per share. Celadon previously agreed to settle accounting fraud charges brought by the SEC in April.
INDIANAPOLIS, Dec. 9, 2019 /PRNewswire/ — Celadon Group, Inc. today announced that it, along with its 25 affiliate entities, have filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. Celadon also announced that it will shut down all of its business operations effective as of today, Monday, December 9, 2019. This 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 intends to use its Chapter 11 proceedings to wind down its global operations.
Paul Svindland, Chief Executive Officer of Celadon, said, “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.” Mr. Svindland noted that, “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.” To support the wind down of operations, Celadon’s lenders have agreed to provide incremental debtor-in-possession financing.
Mr. Svindland further stated, “I would like to thank our vendors, customers, and lenders, and most importantly, I would like to thank our dedicated administrative employees and drivers whose efforts should not be seen as a reflection of this Chapter 11 filing. They have sacrificed so much of their time and effort for Celadon, and for that, the Company is eternally grateful.”
Founded in 1985, Celadon began its operations as a small, dry van carrier with just 50 leased trucks and 100 leased trailers. Celadon was one of the first U.S.-based trucking companies to take trailers into Mexico, and is considered a pioneer of the commerce trail between the U.S. and Mexico. Due to this early success, Celadon was able to rapidly grow its operations and fleet, and in 1994, Celadon completed an initial public offering.
Over the course of the last 34 years, Celadon vastly expanded its footprint to offer point-to-point shipping, warehousing, supply chain logistics, tractor leasing and other transportation and logistics services and, specifically, to provide long haul, regional, local, dedicated, intermodal, temperature-protect, and expedited freight services across the U.S., Canada and Mexico. With over 150,000 border crossings annually, Celadon was the largest provider of international truckload services in North America. At the date of its shutdown, Celadon was operating a fleet of approximately 3,300 tractors and 10,000 trailers with nearly 4,000 employees.
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