Yellow Rejects Bid to Revive the Collapsed Trucking Company | Mint

Yellow Rejects Bid to Revive the Collapsed Trucking Company

Yellow has sent tens of thousands of tractors and trailers to liquidators for final sale.
Yellow has sent tens of thousands of tractors and trailers to liquidators for final sale.

Summary

A notice from the trucker’s lawyers says the bankrupt business is moving forward with the sale of properties and liquidation of equipment.

Yellow rejected an offer to revive the bankrupt trucker and rehire thousands of its former workers, effectively ending a long-shot effort to reverse the collapse of one of the country’s biggest freight carriers.

Lawyers for Yellow told the group seeking to resurrect the trucking company in a letter Wednesday that its bid was “not viable" and that Yellow is moving ahead with the sale of about 130 truck terminals that raised almost $1.9 billion at a bankruptcy auction this month.

The sales of those and other properties and liquidation of tens of thousands of pieces of equipment are expected to bring in significant cash for Yellow’s creditors, the lawyers wrote, “overwhelming the value (if any)" of the revival bid.

Representatives for Sarah Riggs Amico, executive chair of auto carrier Jack Cooper Transport, who is leading the bid, didn’t immediately provide comment. A person familiar with the bid said the group is working on a new, pared down offer that would target Yellow’s remaining real estate and equipment.

Yellow’s collapse this summer marked the biggest-ever failure of a trucker in the U.S. The 99-year-old company was the third-largest carrier in trucking’s less-than-truckload sector, in which freight from multiple customers is combined in a single trailer, with revenue last year of $5.2 billion.

The Amico-led bid aimed to resurrect Yellow as a smaller, leaner trucking company and to rehire some of the 30,000 workers laid off when Yellow went out of business.

The bid included $1.1 billion in financing and faced several big hurdles, including asking creditors to push back repayment of some debts and to accept equity in the new business.

Yellow’s lawyers said in their letter that the bidders hadn’t secured the support of Yellow’s unsecured creditors, which include pension funds that say they are owed several billion dollars. They also said the U.S. Treasury Department, which would need to defer repayment of a more than $700 million loan due next year as part of the revival, hadn’t signaled its support.

The lawyers also said the bid “understates startup costs" and "overstates potential revenue and earnings" of a company whose customers have largely switched to other trucking companies to move their freight.

Yellow filed for bankruptcy owing $1.3 billion to secured creditors. Its lawyers said they would move forward with the auction sale of truck terminals at a hearing scheduled for Dec. 12 in U.S. Bankruptcy Court in Delaware.

Yellow’s truck terminals were appraised at $1.1 billion earlier this year. They proved much more valuable at auction in a sector of the trucking industry where locations are key to the movement of goods and where it has become increasingly difficult to buy or build facilities.

About 90% of the terminals sold to about a dozen LTL carriers.

Yellow plans to sell its remaining owned and leased terminals over the coming months. Tens of thousands of trucks and trailers are expected to be sold by liquidators over the next year.

Write to Paul Berger at paul.berger@wsj.com

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