Days after thousands of employees and truck drivers for Celadon Group Inc. received word that the carrier, one of North America’s largest, was filing for Chapter 11 bankruptcy protection, many are still struggling to take in the news.
While rumors were swirling on social media that the carrier was in financial straits after FreightWaves broke the news on Dec. 6 that the company planned to file for bankruptcy, some former employees said there was little communication among company executives, employees and drivers about what to do when deactivated fuel cards left truckers stranded thousands of miles from home.
Celadon and its subsidiaries, which had more than 2,500 drivers and nearly 1,300 office employees, had been trying to recover from a financial scandal that rocked the carrier after former executives were indicted in an alleged securities and accounting fraud scheme that cost the truckload and logistics company’s shareholders more than $60 million.
A former corporate recruiter for Celadon said that just days before the company announced it would wind down business operations, he was instructed to keep hiring.
“I was told we were trying to turn things around,” recruiter Ernesto Gonzales told FreightWaves. “We were continuing to hire right up until the very end.”
Prior to Celadon’s bankruptcy announcement, Gonzales said, new employees were scheduled to start on Dec. 9, the day the carrier shut down.
He said some former employees plan to work in the company’s billing and collections departments through Dec. 13.
One of Gonzales’ former coworkers, who has been with Celadon for more than 15 years, was recently diagnosed with leukemia. A few days later, she received news that her insurance coverage was canceled after the company announced its bankruptcy.
Some families suffered a double blow on Dec. 9 because both parents worked for the carrier, according to Gonzales.
“Thousands of people didn’t get a severance package and that adds an extra sting,” he said. “The actions of a selfish few screwed over thousands.”
Indianapolis-based Celadon and its subsidiaries have been trying to dig out from the financial scandal that broke in May 2017. Celadon had to restate several years of financial results, going back to 2014, its stock tanked, and it was delisted from the New York Stock Exchange in April 2018. Celadon [OTC:CGIP] stock is now traded on the OTC “pink sheets” market.
Only days prior to the company’s bankruptcy filing, federal prosecutors indicted former Celadon Chief Operating Officer William Eric Meek, 39, and former Chief Financial Officer Bobby Lee Peavler, 40. The Indianapolis men were charged with nine counts each, including one count of conspiracy to commit wire fraud, bank fraud and securities fraud; five counts of wire fraud; two counts of securities fraud; one count of conspiracy to make false statements to a public company’s accountants and to falsify books, records and accounts of a public company; and one count of making false statements to a public company’s accountants.
Peavler faces two additional counts of making false statements to a public company’s accountants.
Some drivers said they had approximately 20 minutes to clean out their trucks after the bankruptcy filing was announced.
Drivers told FreightWaves they tossed microwaves, bedding and other possessions after securing Greyhound tickets because they were limited to what they could take on the bus.
Less than six weeks after being hired to work for Celadon, Johnny Wayne Parady Jr. said he learned the company was ceasing operations.
“I had no clue the company was in financial trouble,” Parady told FreightWaves. “I have a 2-year-old child that I need to provide for. This is terrible timing, right before Christmas.”
Cameron Balch of Tulsa, Oklahoma, started working for the company Dec. 6, the same day he found out there were financial problems with the carrier. He and his fiancée, Andrea Smith, were planning to team drive for Celadon prior to the carrier’s collapse.
“I left my previous trucking company to take this job to be with my fiancée,” Balch told FreightWaves.
Just days before acquiring her company truck, Michelle Sloan, of Waynesburg, Pennsylvania, said company officials stalled on conducting her road test before they deemed her “roadworthy.”
“Right now, I am going to go home and take my time before I figure out my next move,” Sloan told FreightWaves. “I have a 14-year-old and a 23-year-old, and I am just going to spend time with them.”
On the day the bankruptcy was filed, Sloan said, some Celadon recruiters received phone calls from new hires who were headed to bus stations or airports and found out their tickets were canceled or refunded.
“No one called these people back to tell them the company was closing,” Sloan said.
William Baxler, 63, of Macon, Georgia, had more than 46 years in the trucking industry prior to Celadon’s shutdown and is nearing retirement.
Baxler said he didn’t see the Celadon bankruptcy coming.
“They are a huge company. I thought they would survive this,” he told FreightWaves.
Read more articles by FreightWaves’ Clarissa Hawes
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I find it very hard to believe these people when they say, “I had no clue they were in financial trouble.” It has only been all over the internet since 2017…I feel bad for them, but they should have been paying closer attention to this situation.
Elogs are not the problem if you drive legal you drive legal …… your statment just said you drive illegally so you ate part of the problem here so please keep quite about things you know nothing about
One thing I’ll never understand is people not checking out a company that their thinking of going to work for. These issues have been public for a couple years now. Its a shame so many folks outta jobs company wide, but does nobody watch the news get online see whats been reported about a company. People had to know shit was going south in a hurry.
You got that right! I was wondering the same thing. I heard about these crooks over a year ago and was also wondering why owner operators were leased on at such cheap rates! But it’s still a fk’d up situation for these drivers and employees and talk about the worst time of just a couple of weeks before Christmas….Geesh!
The problem was they were hauling freight for a gross rate of $2.003 CD round trip or $1.55 U S per mile and including border crossing. Minimum rates for detention time and freight rates need to be set. In Canada almost 10,000 truck drivers including owner ops including local and dump truck drivers went broke or lost their jobs this year. A local factory in hensal ont hired a total of 21 truck drivers this year for the night shift. The last 4 came from Celadon. A machine manufacturing plant outside if Kitchener hired 6 truck drivers in November plus 4 last week from Celadon. Starting pay there is $26.50 plus full medical after 30 days and 5 percent match on the R S P after 6 months. A local trucking company i( Cambridge Ontario Canada ) said that they must bring in foreigners as they can not get truck drivers when factories and construction are paying $27.00 to $33.00 CD per hour. At current freight rates the O T A is right because we have a surplus of trucks in Canada at this point in time. E – logs are pushing at lot smaller truck companies under 10 trucks out of business .We told the government 2 years ago that with E-LOGS a minimum wage rates ( 1.9 times) and detention pay and parking need to be fixed before E-LOGS.
All celadon trucks been bought out cash.
Two things worth reporting. First, WHY is it that Paul Will has skated past culpability in his role in this monumental disgrace to Steve Russell’s legacy? It was Paul Will who had the most experience and time with Celadon, and was the CEO back when this was set in motion. It was PAUL WILL who was an executive and director at Quality Leasing, and 19th Capital. It is also PAUL WILL who had flatbeds stacked all over the yards for three years not being used, plus various other irresponsible speculations that gave rise to their twisted NEED to cook the books. This man should be forced to stand shoulder to shoulder in shame with his cronies.
Lastly, it should be known that the company’s hand was forced the MINUTE that criminal charges were filed by the DOJ. The indictments left an already struggling entity wide open for further litigation. They did the responsible thing: made deals with creditors to ensure employees received their wages and a way home. The company is always liable for the various nefarious dealings of its staff from the lowest of entry level positions, to the top executive, as it should be. As for laying blame on the DOJ, we don’t know if they had a deadline for filing charges or what that deadline is; what we DO KNOW is that they needed to be charged. The timing was just unfortunate.
We were paid our final settlements as company drivers, including a bonus, and a bus ticket home. Comdata Corp. is the ones who shut down fuel cards that were supposed to be functional, and they WERE turned back on within 36 hours; mine was never deactivated. What bothers me most is how these clowns stripped a solvent company, and destroyed what Steve built. He was a good man, a true open door policy with him. He was one of the good ones. The way that Paul Will made a career there, worked side by side with Steve for YEARS, then turned around and caused all this is deplorable. I can only hope Karma makes her visit with Paul both swift and true.
Oh well, should anyone expect anything more from a company whose former executives have been charged with fraud by the Department of Justice. Hopefully no one forgets that Celadon also ran a lease purchase (fleece purchase) program and was a bottom feeding, rate cutting company.
The federal government could have easily waited until after Christmas, all these poor workers will also get screwed out of last week of pay( mark my words) it happen to me. Anytime you here rumors of bankruptcy in the trucking industry take as truth, find a new trucking co. OR get out of the industry totally.
How in hell is this the federal government fault. I mean in what alternate universe? READ!
It was not a federal government intervention, it was that no one would lend them operating capital and they didnt have enough receivables to keep the lights on.
It is as simple as they saw their cash on hand and realized they didnt have enough to make payroll or some other non negotiable like fuel.
now u think these company care about you. ur wrong if think they do.
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