Celadon Group files for bankruptcy, cuts 4,000 jobs after 2 executives accused of fraud

Vic Ryckaert | IndyStar

Show Caption Hide Caption Celadon Trucking bankruptcy leaves drivers stranded A Florida driver in Oklahoma was forced to leave his truck in Indianapolis.

Celadon Group Inc. filed for bankruptcy Monday and announced it is immediately closing the Indianapolis-based trucking firm.

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," Chief Executive Officer Paul Svindland said in a news release.

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.

Former Chief Operating Officer William Eric Meek, 39, and Chief Financial Officer Bobby Lee Peavler, 40, were arrested Thursday morning on nine counts each that include conspiracy to commit wire and securities fraud and conspiracy to make false statements to the company's accountants and falsify records. Peavler also is charged with two additional counts of making false statements to the company's accountants.

What we know: Celadon trucking, its workers and fraud cases

"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.

Driver Jack Jobes returned his truck to Celadon pic.twitter.com/BfHNMpytUE — Vic Ryckaert (@VicRyc) December 9, 2019

The fraud, combined with industry struggles and the company's debt, left bankruptcy as the only option, he said.

"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," Svindland said.

The most recent federal indictment said Meek, Peavler and others at the company 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.

U.S. Attorney Josh Minkler explains Celadon Group Inc. trucking fraud U.S. Attorney Josh J. Minkler explains Celadon Group Inc. trucking fraud. William Eric Meek and Bobby Lee Peavler arrested on fraud.

Federal investigation: Feds charge former Celadon executives with securities fraud

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.

Celadon was the largest provider of international truckload services in North America, according to the news release.

The company's drivers made 150,000 border crossings every year and operated about 3,300 tractors and 10,000 trailers.

Jack Jobes, 55, was in Oklahoma when he got the news that he was out of a job and had to return his truck to Celadon's headquarters on Monday.

"We basically found out two days ago," Jobes said as he transferred his belongings from the truck to a U-Haul.

Jobes and his dog Bella, a roadside stray he picked up when she was just a puppy, planned to drive home to Pensacola, Fla., Monday.

"We're not even guaranteed to get paid Friday."

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IndyStar reporters Tim Evans and Tony Cook contributed to this story.

Contact IndyStar reporter Vic Ryckaert at 317-444-2701 or vic.ryckaert@indystar.com. Follow him on Twitter: @VicRyc