U.S. trucking giant Yellow files for Chapter 11 bankruptcy after failing to refinance $1.3 billion in debt due in 2024 and leaving 30,000 people out of work
Trucking giant Yellow Corp filed for Chapter 11 bankruptcy on Sunday, saddled with heavy debt after a series of mergers and following tense contract negotiations with the Teamsters union.
One of the biggest names in short-haul trucking, Yellow Corp currently accounts for 15% of the market and has delivered goods to sellers like 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 was preparing to file for bankruptcy and would cease operations immediately.
The bankruptcy filing with a Delaware court lists assets and liabilities estimated at between $1 billion and $10 billion and creditors over 100,000.
“It is with profound disappointment that Yellow announces its closure after nearly 100 years in business,” Yellow CEO Darren Hawkins said in a statement.
Trucking giant Yellow Corp filed for Chapter 11 bankruptcy on Sunday, saddled with heavy debt after a series of mergers and following tense contract negotiations with the Teamsters union
Yellow, formerly YRC Worldwide, is one of the largest trucking companies in the United States and a dominant player in the Less Than Truckload (LTL) segment that hauls cargo for multiple customers on a single truck.
Customers include major retailers such as Walmart and Home Depot, manufacturers and Uber Freight.
Some have suspended shipments to the company for fear of being lost or blocked if the carrier goes bankrupt.
Yellow’s bankruptcy filing comes after Teamsters Union said late last month it had been told the company was going out of business.
The company has entered contentious negotiations with the union over an internal restructuring initiative aimed at increasing efficiency.
He recently avoided a strike by 22,000 workers represented by the Teamsters.
Before resolving the strike threat, Yellow sued the union in federal court in Kansas, seeking to block a strike and claiming that the union’s refusal to bargain had pushed the company to “the brink of extinction.”
The company’s troubles have worsened with a sharp drop in e-commerce shipments from early pandemic highs and a drop in industry-wide freight volumes over the past year.
Yellow, struggling 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.
US taxpayers face potential losses if the company fails to repay a $700 million loan former President Donald Trump’s administration provided to bail out the struggling and mismanaged trucking company in 2020 as part of a pandemic relief program.