Celadon Trucking Laying Off Thousands Of Drivers; Filing For Bankruptcy
INDIANAPOLIS -- A trucking company hit with a scandal involving fraud charges for two former executives is filing for bankruptcy.
Celadon Trucking, which is based in Indianapolis, has filed for Chapter 11 bankruptcy. The move will leave more than 3,000 truck drivers without a job. The company is also cutting 500 administrative positions.
Last week US Attorney Josh Minkler filed federal charges of fraud against former COO William Meek and CFO Bobby Peavler. They're accused of misleading shareholders by funding the company's books to show that Celadon was worth more than it actually was.
The scheme ended up costing shareholders more than $60 million. Shares of the Celadon's stock went from trading over $9.00 a share to just 50-cents when news of the scandal broke last week.
CEO Paul Svindland said in an emailed statement:
"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. 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.”
The company said the job cuts and bankruptcy filing will not affect its subsidiary Taylor Express, which is based in North Carolina.