US trucking firm Yellow files for bankruptcy after loading up on debt (updated)

Yellow

07/08/2023 04:41

(Adds details from filing in paragraph 2, CEO comment in
paragraph 3, background from paragraph 4)
       Aug 6 (Reuters) - U.S. trucking firm Yellow Corp
 YELL.O  filed for Chapter 11 bankruptcy protection on Sunday,
burdened with a heavy debt load after a series of mergers and
following tense contract negotiations with the Teamsters Union.
    The bankruptcy filing in a Delaware court lists estimated
assets and liabilities of $1 billion to $10 billion and
creditors of more than 100,000.
        "It is with profound disappointment that Yellow
announces that it is closing after nearly 100 years in
business," Yellow's CEO, Darren Hawkins, said in a statement. 
  
        Yellow, formerly called YRC Worldwide, is one of the
largest U.S. trucking companies and a dominant player in the
"less-than-truckload" (LTL) segment that hauls cargo for
multiple customers on a single truck.
  
        Customers include large retailers such as Walmart
 WMT.N  and Home Depot  HD.N , manufacturers and Uber Freight.
Some have paused shipments to the company on fears they could be
lost or stranded if the carrier went bankrupt.
  
        Yellow's bankruptcy filing comes after Teamsters Union 
    said
     late last month that it was notified that the company was
ceasing operations.
  
        The company 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.
  
        Before resolving the strike threat, Yellow sued the
union in Kansas federal court, seeking to block a strike and
saying that union's refusal to negotiate had pushed the company
to the "brink of extinction."
  
        The company's struggles compounded with a steep drop in
ecommerce shipments from early pandemic highs and an
industrywide decline in freight volumes over the last year.
  
        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. 
  
        U.S. taxpayers face potential losses if the company does
not repay a $700 million-loan the administration of former
President Donald Trump issued to bail out the long-troubled and
poorly managed trucking firm in 2020 under a pandemic relief
program.
  

 (Reporting by Dietrich Knauth in New York, Priyamvada C and
Juby Babu in Bengaluru, Siddharth Cavale in New York and Lisa
Baertlein in Los Angeles; Editing by Sriraj Kalluvila and Dhanya
Ann Thoppil)
 ((Priyamvada.C@thomsonreuters.com https://twitter.com/priyamouli1812?lang=en;))