COLUMBIA, S.C. — Thousands of people are out of jobs after a large trucking company filed for bankruptcy.
Celadon, a company based out of Indianapolis, will stop all operations except for one location in North Carolina.
More than 3,000 employees that were with the company are now out of a job right in the middle of the holiday season. Thousands of those were drivers and more than 500 were administrative positions.
CEO Paul Svindland confirmed the company's filing for Chapter 11 bankruptcy at midnight. He went on to say the entire company will shut down all business operations except for the "Taylor Express" subsidiary in Hope Mills, North Carolina.
Svindland went on to say the company will ensure drivers deliver their last loads safely and will then be instructed on where to deliver their equipment.
"We have diligently explored all possible options to restructure Celadon and keep business operations ongoing, however, a number of legacy and market headwinds made this impossible to achieve," Svindland said in a press release. "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. Therefore, in conjunction with our lenders, we concluded that Celadon had no choice but to cease all operations and proceed with the orderly and safe wind down of our operations through the Chapter 11 process.”
Many Celadon drivers are being asked to return their truck in exchange for a bus ticket home.
Many of the drivers have been stranded at gas stations because their gas cards no longer work. Gas to fill up a truck could cost anywhere from $400 to $700. Here at this Midlands truck stop, one driver has left their trailer behind.
It's possible now truck stops will have to pay money out of their pocket to tow these trailers away.
On Thursday, U.S. Attorney Josh Minkler announced the indictment of former COO William Meek, 39, and former CFO Bobby Peavler, 40, both of Indianapolis.
They now face charges including wire fraud, securities fraud and conspiracy to commit fraud.
Minkler says the pair concocted and carried-out a complex scheme to inflate the company's value and when the plan unraveled two years ago, shareholders lost more than $60 million.
"As alleged in this indictment, Celadon's books did not reflect the fact that the value of their trucks declined during 2015 and 2016 by tens of millions of dollars," said Minkler.
Minkler said the indictment also alleges Meek, Peavler and others obtained a $25 million loan for their company to falsely pay down a debt but never revealing to lenders or others that it was a loan and then paying back $27 million days later.
If convicted, they could face decades in prison.
Celadon filed for bankruptcy on Sunday, Dec. 8.
Assets is approximately $427 million with an estimated $391 million in liabilities.
There are approximately 3,800 employees. About 2,500 of those are drivers and there are 380 independent contractors.
The company has asked the court for permission to pay employees.