Celadon Group filed for bankruptcy Monday and announced it is immediately closing the Indianapolis, Ind.-based trucking firm.
This story by Vic Ryckaret appeared in the South Bend Tribune.
The move, coming just days after two executives were charged in a $60 million fraud scheme, puts nearly 4,000 employees out of work.
“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 CEO Paul Svindland.
Last week, Josh Minkler, U.S. Attorney for the Southern District of Indiana, charged two former Celadon executives with fraud and other crimes for allegedly concealing millions in losses from shareholders and lenders.
“Celadon has faced significant costs associated with a multi-year investigation into the actions of former management, including the restatement of financial statements,” Svindland said in a statement.
The fraud, combined with industry struggles and the company’s debt, left bankruptcy as the only option, he said.
According to a federal indictment, former COO William Eric Meek and former CFO Bobby Lee Peavler knew that much of Celadon’s trucking fleet declined in value by tens of millions of dollars by 2016 because of a slowdown in the trucking market, mechanical problems and age.
Meek and Peavler concealed the losses instead of accounting for the drop-in truck values, according to the indictment.
If convicted, federal prosecutors say Meek and Peavler each face decades in prison in the case.
