After 99 Years, Trucker Yellow Files for Bankruptcy

Posted on 08/07/23 | News Source: WSJ

Yellow, the 99-year-old trucking company, filed for bankruptcy and is closing the business, falling victim to mounting debt including a government loan and a standoff with the Teamsters union.

The bankruptcy follows years of struggles for the Nashville, Tenn.-based trucker as it tried to address the debt it accumulated through a series of mergers and a $700 million federal Covid-19 relief loan during the pandemic. On July 30, the company shut down its operations and laid off a large number of workers.

“It is with profound disappointment that Yellow announces that it is closing after nearly 100 years in business,” Chief Executive Darren Hawkins said in announcing the filing for chapter 11 bankruptcy protection late Sunday in U.S. Bankruptcy Court in Delaware.

The closure means the loss of 30,000 jobs, including 22,000 positions held by the members of the International Brotherhood of Teamsters. 

The company said it will seek bankruptcy court authorization to make payments including wages, salaries and benefits.

The company said it has lined up a loan to fund its stay in chapter 11, including selling assets. Yellow owns some 12,000 trucks and dozens of freight terminals across the country.

Yellow listed 30 unsecured creditors in its bankruptcy filing, including BNSF Railway, and Home Depot.

Yellow’s demise also removes a major contributor to the Central States Pension Fund, a multiemployer pension fund that received a federal bailout last December under a program aimed at shoring up near-insolvent retirement plans

Yellow was known for its cut-rate prices and moving freight across the country for WalmartHome Depot and many other smaller businesses. Despite swallowing rivals several years ago, getting union concessions over the past 15 years and securing a government bailout in 2020, the company went into a financial tailspin this year as shipping demand foundered and an operational restructuring effort triggered a showdown with the Teamsters union.