US trucking giant Yellow is filing for Chapter 11 bankruptcy after failing to refinance $1.3 billion in debt due in 2024, leaving 30,000 people out of work
US trucking giant Yellow is filing for Chapter 11 bankruptcy after failing to refinance $1.3 billion in debt due in 2024, leaving 30,000 people out of work
Trucking giant Yellow Corp filed for Chapter 11 bankruptcy protection on Sunday, burdened with heavy debt from a series of mergers and tense contract negotiations with the Teamsters Union.
Yellow Corp, one of the most prominent names in short-haul transportation, currently accounts for 15 percent of the market and has been supplying goods to retailers such as Home Depot and Walmart for nearly a century.
Last week, the Nashville-based company — which received $700 million in federal COVID relief funds in 2020 — announced it is preparing to file for bankruptcy and will cease operations immediately.
The bankruptcy filing in a Delaware court lists estimated assets and liabilities of $1 billion to $10 billion and creditors of more than 100,000.
“It is with great disappointment that Yellow announces that it is in business after nearly 100 years,” Yellow CEO Darren Hawkins said in a statement.
Trucking giant Yellow Corp filed for bankruptcy protection in Chapter 11 on Sunday, burdened with heavy debt following a series of mergers and after tense contract negotiations with the Teamsters Union
Yellow, formerly YRC Worldwide, is one of the largest U.S. transportation companies and a dominant player in the less-than-truckload (LTL) segment that transports cargo for multiple customers on a single truck.
Customers include major retailers such as Walmart and Home Depot, manufacturers and Uber Freight.
Some have interrupted shipments to the company for fear they would be lost or stranded if the carrier went out of business.
Yellow’s bankruptcy filing comes after Teamsters Union said late last month it was notified the company was ceasing operations.
The company engaged in contentious negotiations with the union over an internal restructuring initiative designed to increase efficiency.
It recently averted a strike by 22,000 workers represented by Teamsters.
Before resolving the strike threat, Yellow sued the union in Kansas federal court, seeking to block a strike, saying the union’s refusal to negotiate had pushed the company to the brink of extinction.
The company’s struggles were exacerbated by a steep decline in e-commerce shipments following the peaks of the early pandemic and an industry-wide decline in cargo volumes over the past year.
Yellow, saddled with liabilities from the purchases of Roadway in 2003 and USF in 2005, reported total debt of $1.5 billion last year, according to data from Refinitiv.
U.S. taxpayers face potential losses if the company fails to repay a $700 million loan that former President Donald Trump’s administration provided in 2020 to bail out the long-troubled and mismanaged transportation company amid a pandemic relief program.