Yellow Corp gets court approval to outsource vehicle sales

Yellow

27/10/2023 21:33

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      Trucking co. previously sought to fast track vehicle sales
    

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      Outsourcing vehicle sales will help Yellow avoid rent,
maintenance costs
    

  
    By Dietrich Knauth
       NEW YORK, Oct 27 (Reuters) - Bankrupt freight trucker
Yellow Corp  YELLQ.PK  received U.S. court approval on Friday to
hire auction houses to sell off its vehicle fleet over several
months. 
    U.S. Bankruptcy Judge Craig Goldblatt approved Yellow's
proposal at a court hearing in Wilmington, Delaware, after
ordering the auction houses to make additional disclosures to
the court about how they will be compensated and any connections
they have to companies that may bid on the vehicles. 
    Goldblatt's order resolved objections that had been raised
by the U.S. Department of Justice's bankruptcy watchdog, the
office of the U.S. Trustee, about potential conflicts of
interest in the sale process.
    Yellow Corp had previously sought to rapidly offload its
entire vehicle fleet to avoid paying rent, maintenance and
vehicle storage costs during a lengthy sales process. Yellow
owns approximately 11,700 tractors and 34,800 trailers, and it
has additional leased vehicles. 
    The company will now turn over the sale process to Nations
Capital, Ritchie Bros. Auctioneers and IronPlanet Inc., which
have agreed to take possession of the vehicles during the sale
process, according to court filings. 
    The company, headquartered in Overland Park, Kansas, was the
third-biggest U.S. trucker specializing in the
less-than-truckload segment that combines shipments from
different customers in the same trailer.
    Yellow has said that its vehicles and equipment have
previously been appraised at a $900 million value, but it
acknowledged that the appraisal may not be up to date. Yellow
has sales targets for the auctioneers, with $475 million on the
low end and $800 million at the high end. 
    Yellow, which filed for bankruptcy in August, is selling its
vehicle fleet separately from its shipping centers and other
real estate. Yellow has received a $1.525 billion bid for its
real estate assets from rival trucking company Estes Express
Lines, but it continues to seek higher bids. 
    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 company "mismanaged" its way to
bankruptcy.  

    The case is In re: Yellow Corp, U.S. Bankruptcy Court for
the District of Delaware, No. 23-11069.
    For Yellow: Allyson B Smith of Kirkland & Ellis; Laura Davis
Jones of Pachulski Stang Ziehl & Jones; among others.

    Read more: 
    Bankrupt trucking company Yellow eyes October sale of
vehicle fleet
    Teamsters union pushes for US bankruptcy reform after
Yellow's collapse
    US trucking firm Yellow files for bankruptcy, blasts
Teamsters

 ((Dietrich.Knauth@thomsonreuters.com;))