Bankrupt trucking company Yellow eyes October sale of vehicle fleet

Yellow

15/09/2023 18:29

By Dietrich Knauth
       NEW YORK, Sept 15 (Reuters) - Yellow Corp  YELLQ.PK 
received U.S. bankruptcy court approval on Friday to sell its
vehicle fleet by October, while continuing to market its real
estate assets, which have already received a $1.525 billion bid.
    The freight shipping company, which went bankrupt in August
after a protracted labor dispute, owns approximately 12,000
trucks and 35,000 trailers, according to its bankruptcy court
filings. Yellow has set an Oct. 13 bid deadline for those
assets.
    Hundreds of buyers have already expressed interest and
signed non-disclosure agreements, and some have begun conducting
on-site inspections, Yellow attorney Allyson Smith told U.S.
Bankruptcy Judge Craig Goldblatt at a court hearing in
Wilmington, Delaware. 
    "The sale process is well underway at this point," Smith
said. 
    Yellow intends to conduct an auction for the vehicles by Oct
18 and seek court approval for the vehicle sale on Oct. 27. 
    The company is taking a longer time to sell its real estate
assets, despite having a $1.525 billion offer in hand from rival
shipping company Estes Express Lines. Yellow has set a Nov. 9
bid deadline and expects to seek court approval for a real
estate sale in December. 
    A longer sale process will allow more competition for
Yellow's 300 shipping terminals and other real estate assets,
which have already generated significant interest from buyers.
    Estes initially offered $1.3 billion for the real estate
early in Yellow's bankruptcy, an offer was that was later topped
by a $1.5 billion bid from Old Dominion Freight Line. 
    Smith said Estes' latest bid will provide more than enough
cash to pay off the company's $1.2 billion in pre-bankruptcy
debt, including $700 million owed on a U.S. Treasury Department
bailout loan approved by former President Donald Trump's
administration in 2020.
        Goldblatt also granted final approval on Friday for a
bankruptcy loan of up to $212 million, extended by hedge fund
Citadel and equity investor MFN Partners. 
    Yellow entered bankruptcy with $39 million in cash, and it
previously told Goldblatt that the loan would allow it more time
to seek the best possible bids for its assets. 
    Yellow blamed its collapse on a labor dispute with the
International Brotherhood of Teamsters union, and it terminated
about 22,000 union-represented drivers when it went bankrupt.
The union has said the Nashville, Tennessee-based company
"mismanaged" its way to bankruptcy.

 (Reporting by Dietrich Knauth, Editing by Alexia Garamfalvi and
Nick Zieminski)
 ((Dietrich.Knauth@thomsonreuters.com;))