Celadon Group Inc. announced it has filed for Chapter 11 bankruptcy protection and was shutting down all of its business operations as of Dec 9.
Founded in 1985, the Indianapolis-based truckload carrier, whose services include temperature-controlled transport, was No. 27 on the 2019 Fleet Owner 500 list of the largest for-hire carriers in the United States in Canada. This is believed to be the largest truckload bankruptcy filing in history.
The company said in a statement the shut down does not include the Taylor Express business as it explores a sale.
“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.” said Paul Svindland, CEO of Celadon. “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,” he added. “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.”
To support the wind-down of operations, Celadon’s lenders have agreed to provide incremental debtor-in-possession financing.
Celadon was one of the first U.S.-based trucking companies to take trailers into Mexico. It began trading in the New York State Exchange back in 1984.
It was founded by Stephen Russell, who died in 2017 at the age of 76. The company has struggled in recent years due to a financial scandal. Last week two former executives were charged with fraud by the U.S. Department of Justice.