Ex-Celadon trucking executives settle case with SEC

2 had been accused of devising scheme to conceal ‘tens of millions of dollars in losses’

Noi Mahoney

2 years ago

The Securities and Exchange Commission has agreed to settle an accounting fraud case against two former Celadon Group Inc. executives accused of engaging in a scheme to hide millions in losses before the Indianapolis-based trucking company filed for bankruptcy and ceased operations in 2019.

Former Celadon trucking executives Eric Meek and Bobby Peavler agreed to a settlement with the SEC following a Jan. 30 conference, according to court filings.

The court documents do not contain any details about the settlement, and attorneys for Meek and Peavler did not immediately respond to a request for comment from FreightWaves. SEC officials also declined to comment on the settlement. An order signed by Magistrate Judge Tim Baker said the parties must file a proposed agreement within 60 days.

Meek had served as Celadon’s president and COO until his resignation in April 2017. Peavler resigned as the company’s chief financial officer in October 2017 and left the firm in 2018.

The SEC had indicted the two men on Dec. 5, 2019, around the same time the trucking giant filed for Chapter 11 bankruptcy and closed, alleging Meek and Peavler engaged in a fraud scheme to “hide tens of millions of dollars in losses attributed to a significant decline in the value of its trucks.”

Celadon is the largest truckload carrier in U.S. history to file bankruptcy. The north-south truckload carrier had 2,695 trucks, including 2,000 in the United States, 360 in Canada and 335 in Mexico. The company employed about 4,000, including 3,200 truck drivers.

The SEC case was related to a joint-venture arrangement involving the sale of trucks through a Celadon division called Quality Cos. Through buying and selling the trucks at inflated values, the SEC had alleged, Celadon was able to “hide tens of millions of dollars in losses attributed to a significant decline in the value of its trucks.”

The settlement of the SEC’s civil case against Meek and Peavler follows the dismissal in August of a parallel criminal case against the two men brought by the U.S. Department of Justice.

Meek and Peavler were indicted in December 2019 by the DOJ on multiple charges of fraud and making false statements to a public company’s accountants while they were working at Celadon.

In August, the DOJ said in its motion to dismiss nine counts of fraud each for Meek and Peavler that “the indictment should be dismissed with prejudice, in the interest of justice,” meaning the case is now permanently closed and cannot be reopened later.