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Celadon Group granted court OK of TA Dispatch lawsuit settlement
By Caroline Salls
Pittsburgh, July 31 – Celadon Group, Inc. received court approval of an agreement reached with its official committee of unsecured creditors, lenders MidCap Funding IV Trust and Blue Torch Finance, LLC and TA Dispatch, LLC that settles claims arising in an asset purchase agreement-related lawsuit filed by TA Dispatch, according to an order filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.
Celadon said it entered into the asset purchase agreement with TA Dispatch before Celadon filed for bankruptcy, as well as ancillary co-broker, transition services, sales agent and capacity solutions agreements.
According to the motion, TA Dispatch filed a lawsuit against Celadon and its subsidiaries on Dec. 2, 2019 in the Court of Chancery of the State of Delaware, alleging breaches of the purchase agreement, transition services agreement and capacity solutions agreement.
On Jan. 6, 2020, TA Dispatch filed a lawsuit against MidCap in the Superior Court of the State of Delaware for alleged unjust enrichment and tortious interference with the agreements.
Both lawsuits were subsequently moved to the bankruptcy court.
Under the settlement, TA Dispatch will receive $3.25 million, comprised of $150,000 to be paid by MidCap from a cash collateral reserve and $3.1 million by the Celadon debtors from a cash collateral reserve.
In addition, an amount equal to the sum of $1.04 million and a capacity solutions amount from the cash collateral reserve will be remitted to Celadon.
The remaining amount in the cash collateral reserve will be distributed to Blue Torch on account of its second-lien security interest in the funds.
Celadon provides long haul, regional, local, dedicated, intermodal, temperature-protected and expedited freight service and is based in Indianapolis. The company filed bankruptcy on Dec. 9, 2019 under Chapter 11 case number 19-12606.
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