All-Indiana and Indianapolis Bankruptcy Lawyer
On Sunday, December 8, 2019, the well-known Indianapolis-based trucking company, Celadon, filed for Chapter 11 bankruptcy. To make matters worse, the goal of this Chapter 11 case was not to reorganize the company. Instead, it was to allow Celadon to cease its operations immediately. All Indianapolis-based operations completely grounded to a halt. Some drivers were even left stranded out on the road with no fuel-buying ability to continue their routes.
Celadon was truly a trail-blazing company in its time. Founded in 1985 and incorporated in 1986, Celadon quickly rose in the ranks by pioneering loads that could be transported directly to and from Mexico. In fact, Celadon’s president offered valuable advice on the transportation side of the infamous NAFTA agreement that was approved in 1995.
After this major law change went into effect, Celadon grew into the largest of all Mexico-direct trucking service providers. As trends towards North America Free Trade solidified, Celadon was at the forefront of all transportation providers. Loads were transported by this Celadon all around the United States and also into Canada and Mexico on high volume, regular basis. Celadon grew into the massive trucking conglomerate that existed at the time of the bankruptcy filing, consisting of approximately 4,000 employees/drivers, 3,300 trucks, and over 10,000 trailers being associated with the company in some way.
Arguably, the greater cause of Celadon’s bankruptcy was the market. The market had been brutal to trucking companies in the last year with more than 800 of them shutting down around the nation in 2019 alone. Insurance costs, tariffs, and demand fluctuations had rattled the trucking industry in 2018 and 2019.
However, the immediate cause of the bankruptcy was the indictment of two former Celadon executives who are alleged to have submitted fraudulent financial statements for shareholder review. In addition, Celadon was delisted in the Spring of 2017 from the stock exchange for failure to file proper financial reports. The company stock has dropped quickly and then dwindled down to a current value of almost $0 per share. All of this came to a head recently on December 5 with the indictment of their former executives. In addition, the company was facing a $42 million fine that had been brought by the Department of Justice for the alleged accounting fraud of the prior officers and management.
Obviously, Celadon was facing difficult financial numbers that most likely prompted the desire to “cook the books” by upper-level management – at least according to how it appears from the indictment. Would have Celadon survived long-term without these alleged financial misstatements? We may never know now. Celadon’s name power and operations have suffered to the point where it looks like a Chapter 11 liquidation is the only remaining option for the present.
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