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Bankrupt Celadon seeks $900,000 in bonuses for executives, court filings show

Company argues payouts will maximize value during the wind-down of its North American trucking businesses, but the proposal faces resistance from a U.S. federal trustee.

A tractor-trailer of bankrupt Celadon Group. (Photo: Jim Allen/FreightWaves)

Celadon Group is seeking to pay up to $900,000 total in bonuses to three executives to wind down the bankrupt company’s sprawling North American transportation businesses, court filings show.

While many of the details of the proposed payouts and the identities of the executives remain sealed in U.S. federal bankruptcy court, Celadon disclosed the cost in a Canadian court filing last week.

The bonuses also face resistance from the federal U.S. trustee appointed to Celadon’s case, who is fighting both the payments and their court seal. A hearing on the matter is set for Thursday.

Celadon is leaning on the executives “to make extraordinary efforts to manage and implement a successful wind-down and to maximize distributions to creditors,” the company said in a Jan. 7 filing in U.S. bankruptcy court.

The proposed bonuses, paid under a Key Employee Incentive Plan (KEIP), are commonplace in large U.S. corporate bankruptcies, as are seven-figure payouts for executives. But the practice also is controversial.

The U.S. trustee in Celadon’s bankruptcy, Andrew Vara, filed a motion on Friday opposing the proposed payouts and the court seal.


Celadon did not provide “an adequate record that the proposed metrics are truly incentivizing, and that the design of the program is consistent with market compensation for similarly situated participants,” Vara, a U.S. Department of Justice trial attorney, wrote in the filing.

Vara also argued that the court-imposed seal on the bonus plan, made at Celadon’s request, “keeps too much information related to the KEIP out of public view, which is inconsistent with congressional intent for the scrutiny of executive bonus programs approved during chapter 11 cases.”

Celadon noted in its Jan. 7 filing that the company “would be unable to achieve significant value” without the three executives, who “possess irreplaceable skills and experience.”

The successful sale of Celadon’s lone operating trucking business, Taylor Express, hinges on retaining the executives, the company said.

Celadon disclosed the proposed bonuses in a court filing to secure recognition of its U.S. bankruptcy in Canada on Thursday under pressure from more than 200 former employees of its Canadian subsidiary, Hyndman Transport.

Celadon Group filed for Chapter 11 bankruptcy protection Dec. 9, shutting down most of its trucking operations in the U.S., Canada and Mexico. The company has moved quickly to sell off its assets, some through so-called stalking-horse deals with prearranged buyers.

A recently unsealed lawsuit alleges that Celadon was insolvent in November and spent millions of dollars from receivables intended for the Alabama company TA Dispatch.

23 Comments

  1. Fred

    It’s okay for white peoples, look back in 2008 when GM citi bank etc got millions for govt.
    Keep supporting then and keep getting fuck.
    Get your head out of your ass, work for small company.

  2. Noble1= Shamash (Shemesh/Utu) the Babylonian God of the Sun(god of justice, morality, and truth-(enforcer of divine justice )

    Just for you Dave (wink)

    Quote :

    CRAZY TRAIN !( Ozzy Osborne )

    All aboard!

    Hahahahaha

    Aye Aye Aye Aye Aye Aye…

    Crazy, but that’s how it goes
    Millions of people living as foes
    Maybe it’s not too late
    To learn how to love and forget how to hate
    Mental wounds not healing
    Life’s a bitter shame

    I’m going off the rails on a crazy train
    I’m going off the rails on a crazy train

    I’ve listened to preachers, I’ve listened to fools
    I’ve watched all the dropouts who make their own rules
    One person conditioned to rule and control
    The media sells it and you live the role
    Mental wounds still screaming
    Driving me insane

    I’m going off the rails on a crazy train
    I’m going off the rails on a crazy train

    I know that things are going wrong for me
    You gotta listen to my words
    Yeah
    Heirs of a cold war, that’s what we’ve become
    Inheriting troubles, I’m mentally numb
    Crazy, I just cannot bear
    I’m living with something that just isn’t fair

    Mental wounds stop healing
    Who and what’s to blame
    I’m going off the rails on a crazy train
    I’m going off the rails on a crazy train”

    End quote .

    LISTEN TO IT !

    In my humble opinion ……….

    1. Noble1= Shamash (Shemesh/Utu) the Babylonian God of the Sun(god of justice, morality, and truth-(enforcer of divine justice )

      That’s quite an accurate description in regards to the current trucking industry , the regulators , , trucking associations, and a tremendous amount of employers . Any sane person who embarks in this trade as a driver would draw the same conclusion . This industry has gone completely mad .

      The cure ? UNITE !

      In my humble opinion ………..

    2. Noble1= Shamash (Shemesh/Utu) the Babylonian God of the Sun(god of justice, morality, and truth-(enforcer of divine justice )

      Dave I need to post this in an attempt to make people aware in regards to people like you on the internet .

      You’re trolling . What you have done is considered to be online harassment through pejorative labels . Your behavior is unacceptable and can get you in deep trouble . You should act a little wiser and weigh your actions before committing them .

      I have thick skin and I laugh it off . Although I seen many of your sort get in deep trouble for such cyber abuse . It can negatively impact another and bring them to seek justice against your wrongful conduct . Be vigilant my friend , be very vigilant .

      Take this as a friendly warning .

      In my humble opinion …………

        1. Noble1= Shamash (Shemesh/Utu) the Babylonian God of the Sun(god of justice, morality, and truth-(enforcer of divine justice )

          I am thy God , LOL ! Therefore not fake(wink) So are you . However, you’re just an immature one that expresses oneself ignorantly . It’s a pity .

          In my humble opinion ………..

  3. Noble1= Shamash (Shemesh/Utu) the Babylonian God of the Sun(god of justice, morality, and truth-(enforcer of divine justice )

    These unfortunate issues leading to unfortunate experiences can serve as an eye opener .

    Who can you really trust aside from yourselves ?

    This industry is making a mockery out of you . How can you prevent this sort of shenanigan from repeating at your expense ?

    YOU UNITE ! You position yourselves to become the “carrier(s)” collectively ! After all they are dependant upon “drivers” !

    Take the helm !

    In this way you not only prevent potential corporate financial trickery and cooking the books , YOU become the corporation collectively !

    It is you that deals with the customers . It is you that takes the risks on the roads . It is you that is getting screwed by putting your blind faith in another . You are the “face” of the industry .

    UNITE and mitigate your risks while increasing your profits in the process COLLECTIVELY ! Most of you are good hard working people who mean well , you deserve much more and much better .

    It’s grand time to take it up a notch . You’re worth it and you deserve it ! You can do this . I know you can .

    Rather than position yourselves at the mercy of a master , become the master !

    Be proud and “have faith in yourselves” . ” I ” have faith in YOU !

    In my humble opinion …………

  4. Charlie White

    That ain’t right they owe me over 2 grand for vacation plus they took back part of my longivaty bonus that they gave me in Sept and screwed me on my insurance also so they don’t need any so called bonuses they were paid big bucks to begin with and that’s the truth 27 yrs of service gone everyone be safe still tking and doing my thing

  5. Noble1= Shamash (Shemesh/Utu) the Babylonian God of the Sun(god of justice, morality, and truth-(enforcer of divine justice )

    Quote:

    “Celadon Group seeks to pay up to $900,000 total in bonuses to three executives ”

    What sort of bonus is this ??? A bonus for having bankrupt the co ? A Bonus for the incapability of turning the co. around and surviving ?

    A bonus for having left the drivers stranded ?

    You mean a bonus for “those irreplaceable skills” ?

    I would be ashamed to posses such arrogance . YOU BURIED THE COMPANY , and you want a “bonus” ??? !!! Wow ! LOL !

    This further demonstrates why these “executives” should not have been at the helm !

    Are ALL the employees going to receive a bonus for their contributions to the co. ?

    In my humble opinion ………..

    1. Stephen Webster

      The crooks trying to line their pockets at the cost to lease ops. Not surprised on October 16 told Ontario transport minister and the Ont trucking association what was going on along with other people in the following days. This did not need to go down the way it did.

    2. Rodger Armstrong

      Can we talk like friends and be serious…
      DID ANYONE NOT SEE THIS MOTION COMMING I’M SURPRISED IT TOOk THIS LONG….
      Let’s see them put this motion in front of Justice Hainey….see how far it would go…

    3. Shane burns

      We help make the money but won’t get to see nothing they left us all high and dry they acted like we was part of a family if that’s how family treats you in there eyes they he’d to get help.

Comments are closed.

Nate Tabak

Nate Tabak is a Toronto-based journalist and producer who covers cybersecurity and cross-border trucking and logistics for FreightWaves. He spent seven years reporting stories in the Balkans and Eastern Europe as a reporter, producer and editor based in Kosovo. He previously worked at newspapers in the San Francisco Bay Area, including the San Jose Mercury News. He graduated from UC Berkeley, where he studied the history of American policing. Contact Nate at [email protected]