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CanadaInternationalNewsTrucking

Celadon doubles down on Hyndman liquidation as Canadian court fight looms

Sale of Winnipeg terminal for C$4.25 million to commercial real estate firm appears set to be tied up in Canadian courts, where U.S. trucking giant’s failure to initiate timely bankruptcy proceedings north of the border may come back to haunt it and its creditors.

Celadon Group plans to sell Hyndman Transport’s Winnipeg terminal for C$4.25 million to a commercial real estate firm, but the deal likely faces resistance from a Canadian court over the company’s failure to initiate timely bankruptcy proceedings in Canada. 

The deal emerged in public filings in Celadon’s U.S. Chapter 11 bankruptcy proceedings late Thursday. The presiding U.S. federal judge approved Celadon’s request to sell the Winnipeg facility through an expedited process to Winnipeg-based Capital Commercial Real Estate Services. 

But Celadon’s prospects of a quick sale of the terminal as well as Hyndman’s Ayr, Ontario, headquarters appear increasingly dim. An Ontario Superior Court judge on Wednesday moved to bar the sale of any of Hyndman’s assets without his approval – a fact absent from the latest U.S. filings.

Justice Glenn Hainey’s decision – a preliminary instruction called an endorsement – came in response to a petition by a lawyer representing former employees and contractors of Hyndman Transport who are seeking more than C$2 million in unpaid compensation.

Hainey expressed his preference for Celadon to ask to have its U.S. Chapter 11 case recognized in Canada, a common practice in cross-border bankruptcies, and said he stood prepared to place Hyndman Transport into receivership to oversee the liquidation of its assets.  

Hainey also noted that he stood ready to impose the receiver in the event Celadon does not petition for the recognition. 

Under Canadian bankruptcy law, employees receive preferential standing as creditors for a limited portion of any unpaid compensation such as vacation pay and severance. It marks a key difference from the United States.

Any forthcoming Canadian proceedings, along with a court-appointed receiver, will likely slow down any asset sales in the interest in ensuring funds can be dispersed in accordance with Canadian laws.

While developments are good news for former Hyndman employees, they will undoubtedly create delays for U.S. creditors hoping for a speedy payout from any Canadian assets.  

Hyndman Transport shut down on Dec. 9 after Celadon filed for Chapter 11 bankruptcy in the United States. 

While Hyndman and Celadon’s Canadian holding company are part of those proceedings, Celadon kept its entities solvent in Canada – an unusual move for cross-border bankruptcies. 

A federal labor investigation into the dismissals of an estimated 400 Hyndman personnel, most of them drivers, is ongoing. 

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Nate Tabak, Border & North America Correspondent

Nate Tabak is a Toronto-based journalist who covers Canada for FreightWaves. He spent seven years as an investigative 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. Contact Nate at ntabak@freightwaves.com.

2 Comments

  1. This article is somewhat factual and mostly non factual…fact is an investment company is trying to.purchase the building. Fact: they are dealing only with United States lawyers. Fact Justice Hainey: has stated he is willing to.issue an insolvency order from the bench. This order will FREEZE any Canadian asset: furthermore Justice Hainey can and probably will appoint the Canadian trustee. This appointment will NOT be legally bound to deal with the American trustee…furthermore any asset sale on Canadian soil will be under Canadian jurisdiction this will ensure employees with proof of employement are paid first…with any Canadian governmental identity second the appointed trustee third…now owner operators…could be another issue…however I (keyword I) believe Justice Hainey will issue an order at the quest of the trustee to.pay these innocent victims.

  2. Sell the Canadian company to US Express Canada will be pissed. With everyone seeing US Express everywhere. I seen swift trailers at that Ford plant between buffalo and Toronto .

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