US trucking firm Yellow files for bankruptcy, to wind down By Reuters

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<span>© Reuters. FILE PHOTO: Freight trucks are driven on the Fisher freeway in Detroit, Michigan March 27, 2009. REUTERS/Rebecca Cook/File Photo</span><br />
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<p>(Reuters) -U.S. trucking firm Yellow Corp filed for Chapter 11 bankruptcy protection on Sunday and said it would wind down, after struggling with a mounting debt load and following tense contract negotiations with the Teamsters Union.</p>
<p>The nearly 100-year-old company’s bankruptcy filing puts about 30,000 workers at risk when the freight industry is already grappling with slumping volumes.</p>
<p>The company is a dominant player in the “less-than-truckload” segment that hauls cargo for multiple customers on a single truck.</p>
<p>Its clients include large retailers such as Walmart (NYSE:) and <span itemscope="" itemtype="http://schema.org/Corporation"><span itemprop="name"> Home Depot </span></span> (NYSE:), manufacturers and Uber (NYSE:) Freight. Some companies had paused shipments to Yellow on fears they could be lost or stranded if the trucking firm went bankrupt.</p>
<p>Prior to its demise, Yellow, one of the largest U.S. trucking companies, held roughly 8% to 10% of market share, per brokerage TD Cowen. </p>
<p>Yellow said on Sunday it intends to fully pay back a $700 million loan former President Donald Trump’s administration issued to bail out the long-troubled firm in 2020 under a pandemic relief program.</p>
<p>Yellow, formerly called YRC Worldwide (NASDAQ:), in a Delaware court estimated assets and liabilities of $1 billion to $10 billion, with more than 100,000 creditors.</p>
<p>The company has $1.3 billion in debt payments coming due in 2024, including a $567.4 million private-equity term loan in June and the U.S. loan in September.</p>
<p>Yellow also has a roughly $450 million secured revolving loan from a syndicate of banks arranged by Citizens Bank, Merrill Lynch and others that expires in January 2024. </p>
<p>    “This leaves the taxpayer the last creditor to get repaid,” said the authors of a Congressional Oversight Commission report issued in June. </p>
<p>    Yellow also gave the U.S. Treasury 15.9 million shares of its common stock as additional security for the loan, the authors said. The department held a 30.6% stake in Yellow, according to the trucking firm’s bankruptcy filing.</p>
<p>“It is with profound disappointment that Yellow announces that it is closing,” CEO Darren <span itemscope="" itemtype="http://schema.org/Corporation"><span itemprop="name"> Hawkins </span></span> (NASDAQ:) said in a statement on Sunday.</p>
<p>Walmart will not see a hit from the bankruptcy as it has a diversified transportation network, a source familiar with the matter said last week.</p>
<p>UNDER STRAIN</p>
<p>The filing comes after the Teamsters said late last month that it was notified that the company was ceasing operations.</p>
<p>Yellow has been in contentious negotiations with the union over an internal restructuring initiative meant to boost efficiency. It recently averted a strike by 22,000 Teamsters-represented workers.</p>
<p>The company on Monday blamed the Teamsters for driving it into bankruptcy. </p>
<p>The union has previously said the company had mismanaged itself despite worker concessions and a federal bailout. A representative for the Teamsters was not immediately available for comment on Monday.</p>
<p>Yellow, saddled with liabilities from its purchases of Roadway in 2003 and USF in 2005, reported total debt of $1.5 billion last year, according to Refinitiv data.</p>
<p>Shares fell 34.4% to $2.34 in early trading on Monday. The shares soared five-fold last week following a surge in retail investors’ interest.</p>
<p>Meanwhile, some workers sued Yellow on Monday for failing to give the required 60 days notice before firing them.</p>
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