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.”
A financial scandal has rocked Indianapolis-based Celadon and its subsidiaries since 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.
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.
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.
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.