Trucking companies sometimes struggle with their finances. In some cases, those companies go under. That’s what happened in the case of Celadon Group Inc., which was formerly located in Indianapolis. The trucking company filed for bankruptcy back in December 2019, which resulted in almost 4,000 people losing their jobs.
Shockingly, when the company closed, many of its drivers were en route to their next destinations. As the bankruptcy continued on, the company sold off assets. Recently, in December 2020, its headquarters were sold off for $3 million. That sale included the property that had at least three buildings and a parking lot on the east side of Indianapolis. The company that purchased the property, IndyGo, plans to use it as a space for its own operations and staff.
Another company, Palmer Trucks, also announced that it would be expanding into the former Celadon facility.
What leads to the downfall of a major trucking and transportation company?
In this case, Celadon’s chief financial officer and operating officer were both accused of being involved in a fraud scheme. Executive mismanagement, as well as a weakened market, also played a role in the company’s bankruptcy.
Like many other major players, the company did have a turnaround expert on board, but that did not prevent the company from entering into bankruptcy.
What kind of bankruptcy did Celadon use?
Celadon entered into Chapter 11 bankruptcy, which usually allows for a company to stay open and to continue its functions. However, that doesn’t mean that employees won’t be laid off or that all business processes will remain as usual. Many Celadon truck drivers found themselves out of the job even though their routes were not finished.
Celadon’s bad luck played a role in its bankruptcy, but not all bankruptcies work out this way. Trucking companies that are struggling financially may want to consider Chapter 11 bankruptcy as a way of restructuring, so that they can resolve their debts and continue to keep their staff on board. Many companies do emerge from bankruptcy successfully and continue to trade. It may take time, but Chapter 11 bankruptcy gives you the opportunity to restructure and come out stronger.