Employee temporarily loses workers’ compensation after company files for bankruptcy, shuts down


(Photo: WATE)

KNOXVILLE, Tenn. (WATE) — John Shaw, 62, was at UT Medical Center recovering from a crash when he heard that his employer filed for bankruptcy and shut down.

Shaw was on the job and working for Celadon, a trucking company based in Indiana, when he got into a crash on Interstate 75 near Caryville.

That crash occurred exactly a month after two of Celadon’s former top employees were charged with fraud.

Accident on I-75

In November, Shaw was driving south on I-75 when, according to the Tennessee Highway Patrol’s report, another semi-truck veered into Shaw’s lane without a turn signal, causing him to crash into it.

“Whenever the Caryville Fire Department rescue got there, they got me out of the accident, I found that the driver seat was sitting on top of the engine, which had been knocked loose from the frame of the truck, and was sitting in the middle of the highway. My seat was sitting right on top of the engine of the truck,” Shaw said.

He said he nearly died that night.

Shaw was flown to the University of Tennessee Medical Center and had to undergo several surgeries.

UT Medical Center saved his leg

“The people at UT were great. I think they actually saved my leg from having to be amputated,” Shaw said.

He was insured through Celadon and received three workers’ compensation checks, before they stopped coming.

“(My caseworker) called me up and told me that she was told to put my case on hold. Not to do anything else,” Shaw said.

He didn’t know at the time that the state government was in charge of enforcing workers’ compensation. He thought that because it was federally required for companies with a certain amount of employees, that the federal government would enforce payment.

Shaw called around, trying to find out why his checks stopped coming.

“I’ve got a mortgage and hopefully I won’t lose my house and all. My daughter and son said that they would see to it that we don’t lose my house,” Shaw said.

Workers’ Comp checks stop coming

He is a resident of Louisiana and his wife was living in their home when all of this happened.

Shaw said she wasn’t well and wasn’t supposed to be driving anywhere, so two of his workers’ compensation checks weren’t cashed in time.

He even tried calling an Indiana state representative to find out why he wasn’t getting help.

On top of a mortgage, Shaw needed to pay for his medical bills, which included several surgeries, two months of hospital stay and more.

“Just the 15-minute helicopter ride from the accident scene to the University of Tennessee was $43,000 and change. Close to $44,000,” Shaw said.

WATE 6 On Your Side reached out to the Worker’s Compensation Board of Indiana to find out what happened with Shaw’s payments.

What happened to Shaw’s checks

Linda Hamilton, the board’s chair, said that there were a few issues behind the scenes with Shaw’s case.

“When an employer that is self-insured for workers’ compensation purposes files bankruptcy, the bankruptcy court puts a stay on any money going out. So, at that point, the state workers’ compensation agency takes overpayments to injured workers and medical providers caring for them,” Hamilton wrote.

Celadon’s case was a little different.

“In Celadon’s case, the State of Indiana has a bond from Chubb. Chubb and the Board are working to find a new third party administrator because the TPA that had been handling Celadon’s claims does not believe the bond is still valid, but did not clearly tell us this until last Friday,” Hamilton wrote.

Hamilton said that Shaw, and any other Celadon employees in similar situations, will be getting their workers’ compensation payments once another third party is found, and they will receive back pay.

No timetable for benefit checks to resume

Shaw was relieved to know that he will be getting help to pay for his medical expenses, but he, nor the board, knows when that will happen.

Shaw is worried he won’t be able to pay for proper rehabilitation until he receives that money.

He’s also worried that he won’t be able to find a truck driving job once he’s able to work again because of his age.

“I have probably no prospects of a job because nobody’s going to hire a 62-year-old to do a job that they can get a 25-year-old to do,” Shaw said.

6 On Your Side also reached out to the Tennessee Bureau of Workers’ Compensation to find out what protections residents have in this state.

According to state policy, companies are required to set up some sort of financial security so if the company goes out of business, employees on workers’ compensation can still get paid.


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