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Thread: Celedon Biggest Bankruptcy In Truckload History Expected By Midweek

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    Default Celedon Biggest Bankruptcy In Truckload History Expected By Midweek

    https://www.freightwaves.com/news/ce...ed-by-mid-week

    https://transportationnation.com/for...lew-of-crimes/

    Celadon, biggest bankruptcy in truckload history expected by mid-week
    Short seller’s report calling the company “A House of Cards” in April 2017 foretold what was to become of one of the largest truckload carriers
    John Paul Hampstead, Director, Passport Research 15 hours ago 40 34,572 3 minutes read



    Celadon Group (OTC: CGIP) will file for bankruptcy protection under Chapter 11 no later than Wednesday, December 11, according to internal sources. The Indianapolis-based, publicly-traded trucking carrier employed more than 3,200 drivers and took in more than $1 billion in gross revenue as recently as 2015.

    More recent numbers are difficult to come by because Celadon had to restate its financial reporting after mismanagement and a complex accounting scandal that ultimately resulted in former executives being indicted on securities fraud charges yesterday, December 5.

    But the imminent bankruptcy’s immediate cause was a technical default on Celadon’s covenants, the agreements between borrowers and lenders that can define requirements for cash reserves and earnings. Celadon entered the week with scant cash in its accounts to continue operations, but was negotiating with creditors Luminis and Blue Torch to secure further financing. Those talks fell through Thursday morning, December 4, when talks between Blue Torch and Luminis broke down over collateral issues. Blue Torch owned 70% of the debt and Luminus owned 30%.

    Over-the-road drivers may be at risk of being stranded — our source could not verify that Celadon’s drivers would get home — and should fill their tanks at the earliest opportunity as the company’s fuel cards still work. Celadon’s 3,500 employees could lose their jobs soon
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    Default Re: Celedon Biggest Bankruptcy In Truckload History Expected By Midweek

    https://transportationnation.com/for...lew-of-crimes/

    Former Top Celadon Executives Arrested and Charged With Slew of Crimes
    DECEMBER 5, 2019 BusinessTrucking News Articles By Transportation Nation Network
    1 Comments
    Indianapolis, IN – Two former senior executives of a mega carrier were arrested on Thursday after being indicted on a slew of fraud-related crimes, according to the U.S. Department of Justice (DOJ).

    The former chief operating officer (COO) and chief financial officer (CFO) of Indianapolis-based trucking company, Celadon, were charged for their alleged role in a complex securities and accounting fraud scheme that resulted in a loss of more than $60 million in shareholder value, the DOJ says.

    William Eric Meek, 39, and Bobby Lee Peavler, 40, both of Indianapolis, were each charged in an indictment filed in the Southern District of Indiana with 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 was charged with two additional counts of making false statements to a public company’s accountants.

    Meek and Peavler were arrested Thursday morning, according to DOJ officials.

    Both men appeared before U.S. Magistrate Judge Mark J. Dinsmore of the Southern District of Indiana and were released on bail.

    According to the indictment, by approximately 2016, Meek, Peavler, and others at Celadon knew the value of a substantial portion of Celadon’s trucks declined in value in part to a slowdown in the trucking market.

    In addition, many of those trucks, which were owned by Quality Companies (Quality), a division of Celadon, had serious mechanical issues that made them unattractive to drivers, further depressing their value.

    Instead of accounting for this decline in truck values, Meek, Peavler and others allegedly devised a scheme that caused Celadon to conceal tens of millions of dollars in losses to its shareholders, banks and the investing public.
    Last edited by slavenomore; 12-07-2019 at 04:39 PM.
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    Default Re: Celedon Biggest Bankruptcy In Truckload History Expected By Midweek

    A judge has approved the payout of money owed to former employees. The catch is this, approved, but not ordered.
    I wonder who will feel the burn from that decision ?

    Judge Approves Payout Plan to Former Celadon Employees
    A federal bankruptcy judge in Wilmington, Del., on Jan. 3 gave approval for Celadon Group Inc. to pay $4.6 million to drivers and other employees who were expecting paychecks from the company, which on Dec. 9 shut down and entered bankruptcy.
    The order authorizes Celadon to spend $3.4 million for unpaid compensation and termination benefits to its former employees, $900,000 to independent contractors, and $300,000 owed for employee benefits.
    While the order authorizes Celadon to pay the owed wages, it does not require the company to pay. The court documents also do not reveal what percentage of total owed compensation the $4.6 million represents.
    https://www.ttnews.com/articles/judg...adon-employees
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