- The trucking giant Celadon declared bankruptcy on December 8, according to federal filings.
- That leaves about 3,800 employees suddenly jobless weeks before Christmas. Of those, 1,300 have mostly administrative nondriving tasks. The majority of them work in Celadon’s Indianapolis headquarters.
- An internal document shared with Business Insider revealed that Celadon immediately ended health insurance for those approximately 1,300 employees.
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This week has brought the largest bankruptcy in truckload history – Celadon Group Inc., which was based in Indianapolis. The company filed for bankruptcy on December 8 and announced it would close its doors.
“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,” Paul Svindland, the CEO of Celadon, said in a statement.
Rumours of a bankruptcy started on Friday night, when the trucking-industry publication FreightWaves published that the company was slated to file for Chapter 11 protection. Sources told Business Insider Celadon truckers’ fuel cards were shut off and that they feared being stranded.
Meanwhile, back in Indianapolis, some 1,300 Celadon employees at the company’s headquarters learned what the bankruptcy would mean for them and their families.
Celadon employees were told in a letter obtained by Business Insider that:
- Their paycheck will include wages earned through December 7.
- They qualify for unemployment payments.
- They will not receive unused-vacation-time payouts.
- They are not receiving medical, dental, or vision insurance as of midnight on December 8 – a day before they learned they were getting laid off.
- Employees should file for health insurance provided under the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) that allows the recently unemployed to remain covered.
Celadon did not file a notice in compliance with the Worker Adjustment and Retraining Notification (WARN) Act – a federal law that stipulates that companies need to alert employees 60 days in advance of mass layoffs or plant closings.
However, Celadon may argue that the 60-day notification was not possible because of “unforeseeable business circumstances” resulting in the bankruptcy, which excuses companies from filing a WARN report.
Last week, the Securities and Exchange Commission charged two former Celadon executives in relation to a multiyear accounting scandal.
Celadon’s stock plunged to $US0.41 a share on the news Friday – a considerable tumble from the more than $US20 a share that the stock was worth in 2015, before the accounting scandal became public knowledge. As of Monday, share prices were at $US0.03.
Read the full letter here
Do you work for Celadon? Are you a shipper who used Celadon? Email [email protected].
Read more about the trucking recession of 2019:
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