BY Fraser Tennant
Following a federal investigation which incurred significant costs, truckload shipping company Celadon Group, along with its 25 affiliates, has filed for Chapter 11 bankruptcy.
While Celadon intends to use Chapter 11 proceedings to wind down its global business operations, this shutdown does not include the Taylor Express business headquartered in North Carolina, which will continue to operate in the ordinary course while the company explores a going concern sale of its operations.
“We have diligently explored all possible options to restructure Celadon and keep business operations ongoing,” said Paul Svindland, chief executive of Celadon. “However, a number of legacy and market headwinds made this impossible to achieve.”
Among the headwinds and uncertainties impacting Celadon was the multiyear federal investigation into the actions of former management, including the restatement of financial statements. The investigation charged two former Celadon executives with fraud and lying to auditors by concealing losses.
“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,” continues Mr Svindland. “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."
Furthermore, to support the wind down of Celadon’s operations, the company’s lenders have agreed to provide incremental debtor-in-possession financing (DIP).
Founded in 1985, Celadon began its operations as a small, dry van carrier with just 50 leased trucks and 100 leased trailers. 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 across the US, Canada and Mexico.
At the date of its shutdown, Celadon was operating a fleet of approximately 3300 tractors and 10,000 trailers with nearly 4000 employees.
Mr Svindland concluded: "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."
News: Trucker Celadon Group Files for Bankruptcy