Yellow Rivals Purchase Properties at Bankruptcy Auction
Bankrupt Yellow Corp.’s fate has finally been decided after a long-haul saga.
The defunct logistics company’s property assets will be divided among 20 bidders after an auction that took place last week, the largest share going to former rival XPO Inc., which purchased 28 terminals for $870 million.
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The rest will go to several other trucking companies, with Estes Express Lines winning 24 terminals for $249 million, and Georgia’s Saia taking 17 properties for $236 million.
About 130 properties, or three-quarters of Yellow’s portfolio, were put up for sale and are expected to fetch $1.9 billion, according to a U.S. Bankruptcy Court filing in Delaware on Monday evening. A hearing to approve the bids is scheduled for Dec. 12, and Yellow’s remaining properties will be auctioned off piecemeal in the coming months, a source familiar with the process told the Wall Street Journal.
The dismantling of the century-old company’s assets all but quashes hopes for a resurrection—a possibility that’s lingered since Yellow filed its Chapter 11 petition this summer.
Competing firms have jockeyed for pole position with rescue bids, with Yellow accepting a $1.525 billion stalking-horse bid from Estes for its terminals in September, beating out a previous $1.5 billion offer from Old Dominion Freight Line. Jack Cooper Transport executive chair Sarah Riggs Amico bid on the company’s assets, too, including $1.1 billion to repay lenders, settle bankruptcy financing and fund a Yellow reboot. But because the cumulative offers in last week’s auction surpassed these bids, buyers got to divvy up the real estate instead.
Yellow halted operations on July 30. Saddled with $1.5 billion in debt, including $730 million it owed the government to repay a controversial $700 million Paycheck Protection Program (PPP) loan it received during the 2020 Covid pandemic, the company lost its financial footing, despite having over $100 million in cash.
Yellow blamed the Teamsters union, which represents 22,000 of its 30,000 employees, for its financial problems. It filed a breach-of-contract lawsuit against the Teamsters in June, claiming that the union blocked it from fully executing its One Yellow restructuring plan, which would have merged its four regional subsidiaries into a single entity. Yellow claims this deprived it of $675 million in potential annual revenue.
When these tensions went mainstream, major retailers including Walmart and The Home Depot pulled their business to get ahead of a potential strike and crippled Yellow’s liquidity in the process. The Teamsters have repeatedly denied their part in accelerating Yellow’s demise, instead blaming executive mismanagement.
