Celadon Delays Earnings Report Due to Lawsuit
Celadon Group Inc. will delay filing a quarterly earnings report with the Securities and Exchange Commission because of a court ruling against the trucking company.
Owner-operators Charles Wilmoth and Kent Vassey filed the class-action lawsuit in 2013, alleging Celadon withheld more money from their paychecks than it actually paid for fuel purchases. The nearly 2,500-member class asked the court for $3.8 million, plus prejudgment interest in the amount of $1.7 million. The Indiana Court of Appeals affirmed a $3.3 million summary judgment against the company on Feb. 7. Celadon wrote in the filing that while it plans to appeal the judgment, it will record a $4.5 million to $5 million expense before taxes not covered under its insurance. Because of these issues, Celadon said it must delay the filing. It stated that it would submit updated earnings “as promptly as practicable” but no later than five calendar days past the prescribed due date.
“In short, drivers were given ‘charge cards’ by [Celadon] for fuel purchases that allowed them to purchase fuel at a retail price, which amounted to [about a] $0.06 discount per gallon, of which CGI would later deduct that amount from their pay. However, the lawsuit states that CGI received a larger discount [of about] $0.08 from the truck stop (Pilot Flying J) and profited off the difference,” Stephens Inc. analyst Brad Delco wrote in an investors note.
Celadon, which is based in Indianapolis, ranks No. 32 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.
