Even though Eric Meek is no longer a top executive at Celadon Group Inc., he’s not leaving the company entirely behind, a new public filing reveals.
Meek, who was the Indianapolis-based trucking company’s president and chief operating officer until his resignation on April 28, is involved with plans to purchase Prosair Technologies LLC, a Celadon subsidiary. And, for the next 10 months, Celadon will pay Meek $20,000 per month to serve as a company consultant.
These details, and others, were part of an agreement signed May 12 between Celadon and Meek. Celadon waited six days before disclosing the agreement late Thursday in a filing to the U.S. Securities and Exchange Commission.
Meek “is part owner of an entity which intends to purchase the assets of Prosair Technologies LLC,” the agreement says, though the name of that entity and its other ownership are not mentioned.
In January, Prosair launched an app called FreightRover, which the company describes as “an Indianapolis-based web and mobile freight exchange platform” that helps match truck drivers with available loads for haul.
According to a blog post on FreightRover’s web site, the company beta-tested its app with Celadon’s fleet of owner/operator drivers.
“Celadon is excited about our partnership with FreightRover,” Meek was quoted in a blog post on FreightRover’s site.
IBJ was unable to reach Meek by phone Thursday night.
Per his agreement with Celadon, Meek cannot disclose Celadon trade secrets or confidential information for the next 24 months, and he must abide by a non-compete agreement for the next 12 months. Meek’s activities related to Prosair are specifically exempted from both of these requirements.
In another provision of the agreement, Celadon agrees to pay Meek $200,000—$20,000 per month for the next 10 months—in exchange for his services as a consultant.
The consulting work will occupy an average of 10 hours per week and will focus on “assisting the company in transitioning Meek’s previous duties and responsibilities to his functional successor or successors,” the agreement says.
Jonathan Russell, the former president of Celadon subsidiary Celadon Logistics Inc., is Meek’s replacement. Russell, 45, is the son of Celadon’s late founder and former chairman and CEO, Stephen Russell.
All of this is happening against a backdrop of turmoil at Celadon.
On May 1, the company disclosed that its auditor, BKD LLP, had lost confidence in Celadon’s previous 18 months’ worth of financial reports. Celadon also said it was facing liquidity issues, had hired a consultant to help it review its corporate strategy, and was considering selling off some of its assets. The company also said it expected to report a $10 million loss for the quarter ended in March—a report that the company has still not filed.
Short-sellers—investors who profit when a stock falls rather than rises—have charged for months that Celadon's accounting was amiss.
Last month, a Celadon investor filed a lawsuit alleging the company is misleading shareholders about its financial status and covering up an SEC investigation into the company.
Celadon stock closed at $1.95 per share Thursday, down 2.5 percent on the day.