A beleaguered trucking business that received a $700 million pandemic-era loan from the federal government may be forced to file for bankruptcy protection this summer amid a dispute with its union, a development that could leave American taxpayers stuck with a failed company, the New York Times reported. The financial woes at the business, Yellow, which previously went by the name YRC Worldwide, have been building for years. The company lost more than $100 million in 2019 and has more than $1.5 billion in outstanding debt, including the government loan. In 2022, YRC, which ships meal kits, protective equipment and other supplies to military bases, agreed to pay $6.85 million to settle a federal lawsuit that accused it of defrauding the Defense Department. In 2020, the Trump administration, which had ties to the company and its executives, agreed to give the firm a pandemic relief loan in exchange for the federal government assuming a 30 percent equity stake in the company. Three years later, Yellow is on the verge of going bankrupt. Since receiving the loan, the company has changed its name, restructured its business and seen its stock price plummet. As of the end of March, Yellow’s outstanding debt was $1.5 billion, including about $730 million that is owed to the federal government. Yellow has paid approximately $66 million in interest on the loan, but it has repaid just $230 of the principal owed on the loan, which comes due next year. On Tuesday, Yellow sued the International Brotherhood of Teamsters for blocking the company’s restructuring plan and accused the union of causing more than $137 million in damages. The company said that it was taking “immediate steps to try to save itself” and that the union was trying to “cause Yellow’s economic ruin.”
