INDIANAPOLIS, Ind.-- There’s an earthquake hitting the North American trucking industry, and its epicenter is at 9503 East 33rd Street in Indianapolis at the headquarters of Celadon Group Inc.
In what may be the largest trucking industry bankruptcy ever recorded, Celadon is seeking Chapter 11 reorganization listing $427 million in assets, $391 million in debts including a huge restitution payment of $33 million owed to the federal government as the result of a probe into a fraud scheme that investigators charge cost shareholders and investors $60 million due to the overvaluation of Celadon trucks.
The news means 4,000 employees will be losing their jobs and 3,300 trucks and 10,000 trailers will stop rolling.
In a prepared statement, Celadon Chief Executive Officer Paul Svindland said the trucking leader based on Indianapolis’ east side ran out of options to continue operations because, “A number of legacy and market headwinds made this impossible to achieve. Celadon has faced significant costs associated with a multi-year investigation into the actions of former management, including the restatement of financial statements. When combined with the enormous challenges in the industry, and our significant debt obligations, Celadon was unable to address our significant liquidity constraints through asset sales or other restructuring strategies.”
“The company was a good company,” said driver Michelle Sloan as she waited in the rain outside of Celadon’s headquarters for a bus ticket to send her home to Pittsburgh. “For one person or a few people that decided to be greedy or whatever, they screwed a whole lot of people.”
Last week, U.S. Attorney for the Southern District of Indiana Josh Minkler announced that former Celadon Chief Operating Officer William Eric Meek and former Chief Financial Officer Bobby Lee Peavler where charged with conspiracy to commit wire fraud, bank fraud and securities fraud, along with other counts, for allegedly concealing the diminishing value of Celadon’s truck fleet, making it appear the company was worth more to investors than its actual value.
The unraveling of the alleged scheme comes as the North American trucking industry is in a slump.
Industry analysts report that 640 trucking firms declared bankruptcy during the first half of this year as freight volumes have declined for eleven straight months and the market has been in a recession.
Cummins of Columbus, Indiana, the largest manufacturer of truck engines, recently announced it was laying off 2,000 employees worldwide in the first quarter of next year.
Michelle Sloan spent seven weeks in Indianapolis learning to drive a truck and was hours away from taking her first load out on the road last Friday when her trainer cancelled the trip, explaining that Celadon had lost three of its major customers.
“I’m upset. I still have a son at home that expects Christmas. So I hope I get a job soon,” she said. “I think they could’ve handled things differently, but I don’t think they knew all of their accounts would pull out so quickly. As soon as they heard about the bankruptcy thing, they did.”
Drivers say recruiters for other trucking companies have been on the Celadon lot, offering potential jobs to laid off truckers. Some competitors have even offered bus tickets home and food to feed the stranded drivers.
Indianapolis Mayor Joe Hogsett issued this statement about the announcement:
“Today’s decision by Celadon is the result of the worst kind of corporate recklessness, with the actions of a few highly-paid executives creating tragedy for workers across Central Indiana.
While I am concerned about the future of the Celadon campus on the far eastside and the economic impact of its closure, my top priority is the well-being of Indianapolis families affected by this announcement.
I have directed my office and Employ Indy to immediately begin working with the Indy Chamber, as well as community partners like Ascend Indiana, to identify impacted workers and connect them with short-term resources, as well as training and tools that will provide a pathway to new career opportunities.”
Mayor Hogsett and Employ Indy, Marion County’s workforce development agency, provided the following next steps for affected workers:
- Individuals separated from Celadon are encouraged to immediately file for unemployment insurance benefits with the Indiana Department of Workforce Development at: https://www.in.gov/dwd/2334.htm.
- All employees are encouraged to proactively visit Central Indiana WorkOne locations for career services assistance and indicate they are from Celadon. WorkOne locations in Central Indiana are accessible at: https://www.in.gov/dwd/WorkOne/locations.html.
- Additionally, the below resources are immediately available to all Celadon employees:
- Connectivity to Ascend Indiana’s networking platform for job opportunities of professional staff with Central Indiana Corporate Partnership members at: http://bit.ly/Ascend3
- Immediate job search assistance at WorkOne Indy located at 4410 N. Shadeland Ave.;
- Dislocated worker training funds are available for displaced workers in Marion and Central Indiana who are interested in skilling up for their next career opportunity; and
- Complimentary personal finance assistance from Pete the Planner. Impacted workers can reach out to Pete and his team using the dedicated email address: email@example.com.