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Celadon Group has been authorized by a bankruptcy court to spend $1.2 million before Jan. 3, 2020, to maintain operations for Hope Mills, N.C.-based Taylor Express Inc. — the last of its operating units that is still in business — while it pursues a sale of the company.
Federal Bankruptcy Judge Karen Owens, who is presiding over Chapter 11 proceedings for the Indianapolis-based carrier, issued the ruling Dec. 16 from her courtroom in Wilmington, Del., where Celadon is incorporated.
As part of its original bankruptcy filing on Dec. 9, Celadon shut down 25 of its 26 remaining assets and is now liquidating the company. But it wants to sell Taylor Express to raise cash to help pay down its debt, which is estimated at $391 million.
More on Celadon
Dec. 9: Celadon Files for Bankruptcy
Dec. 5: Two Former Celadon Executives Charged in Fraud Scheme
Aug. 15: Celadon Gets $165 Million Infusion From Luminus Management
April 29: Celadon Group Sells Intermodal Operations to Bison Transport
April 25: Celadon to Pay $42.2 Million After Admitting to Accounting Fraud
April 22: Celadon Sells Logistics Group, Hopes for Financial Reporting in Fall
Oct. 3, 2017: Celadon Acknowledges Active SEC Investigation
July 13, 2017: Celadon Chairman, CEO Paul Will Steps Down
July 3, 2017: Celadon to Record Impairment Charge in Review of Company’s Value
May 2, 2017: Celadon's Financial Statements Called Into Question
April 25, 2016: Celadon Founder Russell Passes Away
June 23, 2014: Celadon’s Russell Used Hard Work, Luck To Build Large Cross-Border TL Carrier
Taylor Express counts Lowe’s hardware stores among its customers.
In a Dec. 13 court filing, Celadon said it wanted to keep Taylor’s 160-truck fleet operating to help preserve its market value and sell it on a “standalone, expedited basis.”
Taylor Express President Dave Wiebusch told Transport Topics he had no comment after the judge’s decision was made public and had been published.
As part of its bankruptcy, Celadon is borrowing $11.25 million to wind down its operations and pay its drivers. Recently, Owens authorized that $5.4 million of that line of credit be spent to make payroll.
A court-approved plan crafted by the company gives Celadon until the end of January to secure final approvals for sales of its assets.
The decision to declare bankruptcy comes just four months after 34-year-old Celadon secured $165 million through the sale of a 49.9% stake in the company to Luminus Management, a group that had previously owned about 17% of the company.
In the first nine months of 2019, according to Broughton Capital, 795 trucking firms shut down, more than in all of 2018, when 310 companies shut their doors — the lowest number on record. Broughton Capital tracks trucking closures and said each of the companies that went out of business had about 30 drivers.
According to the Federal Motor Carrier Safety Administration, as of October, Celadon was operating 2,771 trucks and had 2,553 drivers.
Among the financial headwinds Celadon was facing was a $42.2 million fine levied against the company by the U.S. Department of Justice in the wake of an investigation of accounting fraud levied against prior management.
On Dec. 5, two former Celadon executives were indicted by the Securities and Exchange Commission on charges related to those allegations.
The New York Stock Exchange delisted Celadon in the spring of 2017 after it failed to submit quarterly and annual reports, as required by the SEC. Before the bankruptcy, Celadon’s new leadership was planning to file financial statements dating back to February 2017 and amend those as far back as June 30, 2014.
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