Major trucking corporation with 30,000 workers files for bankruptcy
The trucking giant, Yellow Corp., had been financially struggling for years leading up to the filing
Yellow Corp., a major U.S. trucking company, has filed for bankruptcy after struggling financially for years and accumulating more than $1 billion in debt.
The company filed for Chapter 11 relief Sunday in U.S. bankruptcy court in the Delaware district after accumulating about $1.5 billion in debt, about $729.2 million of which was owed to the federal government, the Associated Press reports.
The Nashville based firm had over 30,000 employees across the country, making it one of the largest trucking companies in the country.
"It is with profound disappointment that Yellow announces that it is closing after nearly 100 years in business," Yellow Corp CEO Darren Hawkins said in a statement Sunday night. "Today, it is not common for someone to work at one company for 20, 30, or even 30 years, yet many at Yellow did."
Under the Trump administration, the Treasury Department reportedly granted $700 million in a pandemic-era loan to the company on national security grounds.
Yellow had reportedly paid $67 million in cash interest on the loan as of June 30. The $700 million dollar loan was set to be due in 2024.
According to a recent congressional probe, the Treasury and Defense departments "made missteps" in the decision, noting that Yellow’s "precarious financial position at the time of the loan, and continued struggles, expose taxpayers to a significant risk of loss."
Stifel research director Bruce Chan reportedly said last month that the financial chaos at Yellow "is probably two decades in the making."
"At this point," Chan said, "after each party has bailed them out so many times, there is a limited appetite to do that anymore."
The workers' union, Teamsters, which represented 22,000 Yellow employees, was prepared for the bankruptcy and reportedly was fighting for a new contract over pensions, which Yellow agreed to in order to avoid walkouts.
Yellow reportedly blamed company's failure on the nine-month talks with Teamsters, saying that instituting a plan to modernize operations was not possible during that time.
In the Delaware court, the trucking company reportedly asked for permission to make payments, including for employee wages and benefits.
"Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government," Teamsters General President Sean M. O’Brien said in a statement last week.
The company will liquidate but it is not probable that the money recovered in liquidation will cover debts owed, officials said.