Last Friday, December 6, FreightWaves reported that Celadon intended to file Chapter 11 bankruptcy and now the company has made it official. On the surface, it sounds like Chapter 11 will give hope to at least some of the 4,000 employees at the company. Chapter 11 is the process used to describe a restructuring where the company can continue to operate. If the company had pursued a Chapter 7 bankruptcy, it would result in a full shutdown, but this didn’t happen.
The company chose the Chapter 11 process for very specific reasons – it intends to operate two of the company’s subsidiaries to help secure funds for the creditors. This does not mean that Celadon’s business will survive intact. The bankers will appoint a trustee that work alongside the lenders intends to pursue a structured liquidation of the various assets, including the operating business units.
The over-the-road business is the largest entity inside of the company and the one that is most recognized across the industry. This is being shut down. Unfortunately, after a gallant attempt by management, the company was unable to save the carrier’s flagship. The over-the-road part of the company has been shuttered and the assets will be sold off to the highest bidder, including trucks and trailers. Real estate, the most valuable portion of the assets, will also be sold, likely to separate bidders.
As reported by FreightWaves’ Canadian reporter, Hyndman Transport, Celadon’s Canadian subsidiary, was also shut down yesterday. Hyndman, an 82-year old company, had been headquartered in Ayr, Ontario.
“Lots of drivers are in shock,” a driver told FreightWaves on the condition that his name was not published. “So far, we are frozen. No new loads and all current drivers on loads are being told to finish them and bring their equipment back to the yard.”
Hyndman Transport’s shutdown will make it Canada’s largest trucking failure of 2019 – the second linked to the demise of a U.S. parent company. Hyndman reportedly had about 300 trucks and handled Canadian and cross-border routes.
In some good news coming out of this sad story, according to the press release announcing the official bankruptcy, two Celadon subsidiaries – Taylor Express and the Mexican subsidiary, Jaguar Transportation – will continue to operate and will be sold off intact in a Section 363 Process. This method allows management, working alongside the creditors, to control the auction process and get the highest possible price for the companies. Keeping them intact allows Taylor Express and Jaguar to fetch the highest possible prices.
According to Taylor’s website, the company describes itself:
Taylor Express was founded and incorporated in 1987 as a truck load carrier. The company has grown steadily since then by providing quality service offering real value to customers and by reinvesting in the company to assure financial stability.
We are a leading carrier in the tire and rubber industry, providing dedicated services on critical raw materials as well as transporting finished goods for the tire industry and many other well known companies like Kohler, Lowes Hardware and Purolator just to name a few.
Today, we have over 150 tractors. Each is equipped with Omnitracs hardware and Tom McLeod Software for route accuracy and control. We also have over 380, 53-foot dry vans and 298 specialized hopper trailers. All of our equipment is serviced at our operation centers in Hope Mills, North Carolina, and Union City, Tennessee. Maintenance facilities include full shop with wash bays, body and paint rooms.
In January, 2015, we became part of Celadon Trucking, Inc. This has increased our footprint in the trucking industry. With their support, we’re able to cover even more loads across the midwest, northeast and southeast regions of the United States including Canada.
As reported earlier in FreightWaves, Jaguar Transportation, the Celadon-owned carrier based in Mexico, has indicated that it will remain operational and continue its cross-border shipping.
“Jaguar will operate in the same way it has been working. The situation that Celadon is going through does not compromise this company at all,” Jaguar company officials said in an email to FreightWaves reporter Noi Mahoney.
However, Jaguar Transportation’s webpage was removed on Dec. 9. It is not clear if the company’s web address was changed or shut down. The company’s Facebook page was still up.
Jaguar Transportation was listed as a wholly owned subsidiary of Celadon Group Inc. in a 2016 filing with the U.S. Securities and Exchange Commission.
Jaguar Transportation was founded in 1975 near Monterrey, Mexico, and acquired by Celadon in 1992. According to a 2018 marketing brochure, Jaguar Transportation said it had 450 trucks and 600 employees.
This is good news for the employees of Taylor Express and Jaguar Transportation, because it appears they will get to maintain their careers even after their ownership by Celadon is severed.
Unfortunately, Celadon’s over-the-road operation is not coming back. Employees at corporate headquarters were called into a meeting early yesterday, Monday, Dec. 9, and were told to clean out their desks and vacate the building.
Business Insider reported that the nearly 1,300 office and administrative employees were told that their health benefits and accrued paid time off will not be paid.
The liquidation process will start once the operations have shut down. Celadon’s operational management is working diligently to recover equipment and assets across its network and will take full inventory of the pieces once the freight, drivers and most administrative staff are gone.
A friend of mine asked if Celadon could resurface like Toys ‘R’ Us has.
My answer was, “No, truckload carriers don’t come back from death. The hardest thing is to recruit drivers and no driver would join the carrier. But don’t be surprised to see management resurface soon. They were not responsible for the issues and were dealt a losing hand from the time they started. They have gained an enormous amount of experience and are likely walking away with nothing, much like the other employees.”
For employees impacted by the Celadon shutdown, they can go to FreightWaves.Careers. We have setup a free job board to match employees with job opportunities in the transportation and logistics space.
FreightWaves will continue to report on the Celadon bankruptcy and the many issues that flow from it.
Steven
Cheap freight.
If rates will be reasonable it will be a different song.
To many regulations also hurts big time this industry.
Noble1
YOU’VE BEEN THUNDERSTRUCK ! AC/ DC !
Would be appropriate as a statement . Turn this situation into a party ! However , in order to do so you need to learn the lesson being taught and turn it to your advantage .
And if you do , it’ll lead to MONEY HONEY ! And we all know “MONEY TALKS ” !
Otherwise it’ll be a HIGHWAY TO HELL !
YEEEE HAAAA !
In my humble opinion ………….
Paul
I quit those CROOKS years ago, there leave purchase plan was always a scam.
10 E C Tornado
I worked several years at Celadon beginning in the early 1990’s. I often asked myself why I left in 2000. Life was good back then. The company was much smaller and drivers knew each other and groups would gather in restaurants or drivers rooms and enjoy great times together. I learned a at Celadon and became a trainer at one point. Life was good back then. I remember so many friends I had there. Unfortunately, we lost contact as time passed. It breaks my heart to know that a company I really loved working for fell to face a scandal of this dimension. I hop all goes well for the administrative workers, but my heart is of course hurting for the drivers. Especially the drivers who leased a truck from the company only to lose every thing they paid into a future ownership. I pray everyone will soon be established in new positions soon. Be thankful for family and friends regardless of outcome. Good luck, and hopefully 2020 will bless you and you families. Try and have the best Christmas possible.
Kevin
Any of the drivers in Virginia looking for a job contact me. Small company with 20 trucks looking to fill 6 empty trucks immediately. Based in Sandston, Virgina. Patel Transport.
Pierre Laguerre
http://Www.fleetingpro.com
They can help you find drivers to keep your trucks running around the clock.
Michael Loguidice
Labor Finders Helps Truckers Deliver… Each of our two hundred offices throughout the country has the ability to assist in obtaining jobs for them immediately…
https://www.laborfinders.com/media-center/labor-finders-helps-truckers-deliver/
Noble1
From my perspective too many loopholes in the system which favor corporations . In this case :
Quote :
“Celadon did not file a notice in compliance with the Worker Adjustment and Retraining Notification (WARN) Act — a federal law that stipulates that companies need to alert employees 60 days in advance of mass layoffs or plant closings.
However, Celadon may argue that the 60-day notification was not possible because of “unforeseeable business circumstances” resulting in the bankruptcy, which excuses companies from filing a WARN report.”
End quote ,
Yeah ok , as if they didn’t see this coming . They knew the SEC was going to hammer former Execs for the scandal , then once it was announced they filed CH.11 shortly thereafter . Lenders certainly didn’t waste any time once the SEC announcement came out .
I certainly understand why Celadon didn’t give any warning per se until the last minute . However they DID GIVE WARNING to customers to find another carrier but omitted warning employees . The point is the FACT that they didn’t warn employees was NOT due to supposedly “unforeseeable business circumstances” ! Had they gave warning before hand they wouldn’t have been able to earn coin until the last minute . They would have caused panic . So they didn’t forewarn in an attempt to protect themselves . Otherwise ,ie; those Fuel cards and repossessions etc would have been shut off and commenced sooner .
That being said , the potential “excuse” for not alerting employees with accordance to the WARN Act shouldn’t fly . THEY WARNED ie; CUSTOMERS BEFORE EMPLOYEES ! Their hand was forced due to the SEC announcement and Lenders repossessing commencement , however , THEY KNEW it was coming . .
I really hope drivers/employees are taking this all in and realize how businesses operate . At least drivers & employees will get paid(see title at bottom of comment to read Celadon letter to employees )
Quote from freightwaves :
“Last Thursday, December 5, rumors swirled as lenders began repossessing equipment from Celadon. The next day, internal sources at Celadon told FreightWaves about the planned filing.
On Friday Celadon also began advising its largest customers to find other transportation providers, but did not inform its own employees about the expected bankruptcy or shutdown. Customer service and driver managers found out from customers and drivers that the company was in trouble on Friday night, but lacked context.
While management had informed shipper customers, they failed to inform internal staff.
FreightWaves received notice late Friday from a person not affiliated with the company that FedEx and other accounts had cut the company off. Other shippers, including Walmart, MillerCoors and Conagra also started to cancel pre-planned loads.
In some cases, Celadon drop trailers with freight pre-loaded at shipper locations were unloaded and the freight given to other carriers.
When shippers started to cancel loads that were pre-booked late Friday, the jig was up.
It became apparent inside of headquarters that the rumors had some teeth to them and questions started to be asked.
Over the weekend, Comdata shut off fuel cards, briefly re-activated them and then cut them again. FreightWaves heard reports from other carriers’ drivers who witnessed Celadon trucks being repossessed and towed away from truck stops. ”
RE-QUOTE :
“On Friday Celadon also began advising its largest customers to find other transportation providers, but did not inform its own employees about the expected bankruptcy or shutdown.”
“While management had informed shipper customers, they failed to inform internal staff. ”
End quotes .
For those of you interested you can read further on business insider :
“Bankrupt trucker Celadon told laid-off employees that they’ve lost health insurance and won’t receive unused-vacation-time pay — read the full letter here”
In conclusion DRIVERS see it all coming beforehand .
In my humble opinion …………..
Noble1
Furthermore , every employee related to Celadon and or its subsidiaries that didn’t get their 60 day notice should be compensated with a 60 day severance pay before any creditor sees a dime .
I hope the bankruptcy judge will be in a good mood and be reasonable .
Merry Christmas !
In my humble opinion ……….
Corey Jackson
A carrier can come back from the dead. Under a rearranged name but they can reappear. I’ve seen it before. The old Floyd & Beasley out of Sycamore Alabama is now Heritage Trucking even tho you can’t get any of their drivers to openly admit it. Freymiller came back. Simon Trucking is the old Dick Simon. It can happen if trustworthy people are in control
Andrew
Didn’t LME do something similar before they officially went under earlier this year as well?
James Page
This is what happened to me back in the 80’s. with “fleathline” a company owned by “major lines” in Vineland NJ.
They skimmed 3 cents a mile off of every driver and other little tricks.
came to work and the gates were closed and locked with the”DOT” INSIDE.
Trucking is a dam hard way to make a living and a lot of good folks get hurt.
My prayers are with the driver’s and their loved one’s