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  • WAIT.USA
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  • ITVI.USA
    15,262.850
    66.230
    0.4%
  • OTRI.USA
    24.420
    -0.210
    -0.9%
  • OTVI.USA
    15,223.280
    67.520
    0.4%
  • TLT.USA
    2.680
    0.000
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  • TSTOPVRPM.ATLPHL
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  • TSTOPVRPM.CHIATL
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CanadaInternationalNewsTrucking

Celadon drained cash of Canadian trucking business, former Hyndman executive alleges (with video)

Ex-chief financial officer of Hyndman Transport accuses Celadon in affidavit of depleting funds generated by profitable core business in Canada and hurting former drivers’ and others employees’ ability to claim more than C$2 million in unpaid compensation.

Celadon Group depleted the cash generated by the profitable core business of Hyndman Transport without leaving sufficient funds for employees and creditors after its sudden shutdown, the Canadian trucking company’s former chief financial officer alleges in a forthcoming court filing. 

Jeff Sippel details the allegations in an affidavit that a lawyer representing more than 200 former Hyndman employees and contractors seeking C$2.3 million in unpaid compensation plans to file in Ontario Superior Court on Wednesday as part of forthcoming Canadian bankruptcy proceedings.

Sippel, Hyndman’s CFO at the time of the Dec. 9 closure, alleges that Celadon’s transfers from Hyndman’s accounts, in effect, undermined former employees’ preferential standing under Canadian law and that its failure to initiate timely bankruptcy proceedings in Canada deprived them of federal benefits. 

“I am also concerned that prior to ceasing operations, Celadon diverted funds from the accounts of Hyndman Canada without ensuring there will be sufficient cash left to pay amounts owing to employees as well other Canadian creditor claims,” Sippel said in the affidavit.

The former executive does not accuse Celadon of intentionally trying to harm former employees. But he raises serious concerns about cash transfers before and after Hyndman’s closure and its efforts to sell off Hyndman’s facilities in Canada. 

Sippel’s claims, including that Hyndman had a net positive cash flow of more than C$600,000 in November and had several million dollars in receivables, also raise questions about why Celadon opted to close the trucking company rather than sell it intact. 

Sippel intends to serve as the representative for the former employees – primarily truck drivers – as they seek C$2.3 million in unpaid compensation from Hyndman’s Canadian assets. Sippel contends that he is owed about C$77,000. 

Celadon is planning to file for recognition of its Chapter 11 bankruptcy proceedings in Canada, perhaps as early as Thursday. A court-appointed receiver will oversee the liquidation of Hyndman’s assets and payments to creditors. 

A judge in Canada has barred Celadon from transferring funds to creditors in U.S. Chapter 11 proceedings or selling assets in Canada without his approval.

A lawyer for Hyndman Transport did not immediately respond to FreightWaves’ request for comment.

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Nate Tabak, Border and North America Correspondent

Nate Tabak is a Toronto-based journalist who covers cross-border trucking, logistics and trade for FreightWaves. Before moving to Canada, 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 ntabak@freightwaves.com.

11 Comments

    1. I think the majority of companies out their would do the same thing. As it seems to be the transportaion industry is crooked from the word go.

  1. It’s time for serious jail time and the taking all assets of these crooked CEOs , finical predators, and all upper management officers. They have taken great care of there pockets and families on the backs of the hardworking people in blue collar communities that did the labor. It’s time for the little guy to get paid for there labor, LETS TAKE IT FROM THE CROOKED People at the top.

    1. It looks like at least in this case that a “Top” guy is actually speaking out against his former employer and trying to help out the little guy. I agree the people that are crooked need to be held accountable, but not everyone in management is bad.

  2. After the way Celadon did everyone in the lease purchase program, especially when it came to the flatbed division, formerly Evans transport. I just wish that I would have been able to still have my truck. I bought with them for over a year to get my $2,500 back that was taken from me for a insurance Gap policy that they did not even have. As you can tell by the statement I never did get my money back

  3. These CEOs should have been watched and regulated from the word go I don’t know how they get away with what they do you can’t tell me only one person knows about what’s going on..that is so sad for the new generation that’s trying to make something of what they have and coming into the industry.. I totally support the judge in Canada for his decisions.. get rid of the groundhog…

  4. If people have followed my comments I’ve been pretty well dead on. As for the transfer of funds I am of the belief that any company and or person would of done the same. It would be interesting to.read the proffered affidavit. Furthermore did any of the management team direct any payments beyond the scope of their employment covenants.

    The Canadian courts has the judge in Hainey who.is a cockwomble loves ego generated attention. The facts and law are on the side of the employees.

    For the United States investment firm buying the Ayr building to me that was probably based around a Quebec based carrier securing close to Forty (40) drivers and some operations staff.

    1. Yes celadon was in trouble in first week of October of 2019. I sent a letter to O T A and the ont minister of transport Oct 16 of 2019 . Both told me I was miss informed. Celadon was cheating truck drivers all fall and the Ont government did nothing despite over 7 different people telling them about celadon as well other large trucking companies cheating truck drivers in Ontario Canada.

  5. There really isn’t adequate laws to punish these theives. I’ve been ripped off by many trucking companies because it seems they can do as they please. Decide not to pay….oh well says the government overseers.

  6. Truck drivers should pay extremely close attention to this story . It can occur at any carrier you drive for , anyone of them .

    Truck drivers should be thinking about ways they can prevent themselves from becoming a victim of this sort of potential issue .

    There are certainly a few that fly off the top of my mind . Among them one would be to UNITE , structure yourselves collectively through an Alliance and collectively OWN “carriers” and haul for yourselves through your own carrier(s) .

    Yes that implies forming a sort of cooperative owned by you collectively for which you haul and are employed by ! Not only will you become independent in the process , you will increase your income tremendously if the “structure” is well managed .

    If anyone has learned anything in this industry , it’s to be extremely vigilant in whom you put your faith and trust in !

    From this day on I will no longer blame a carrier nor a regulator . I will blame truck drivers for being negligent and ignorant . Your division is your weakness . STOP depending on others for your livelihood . UNITE , take responsibility and improve your conditions , don’t depend on others to do it for you .

    In my opinion …………

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