Yellow, a trucking company that filed for bankruptcy protection last Sunday, told a judge this week that it would fully repay the $729 million it owed the federal government by selling warehouses, trucks and other assets. But with its industry in a downturn, Yellow could struggle to get top dollar for its assets, the New York Times reported. Failure to pay back taxpayers in full would be an ugly conclusion to a three-year financial saga that began during the pandemic. The Trump administration handed a financial lifeline to Yellow, then called YRC Worldwide, in 2020, when the economy was in free fall and the company, which had been struggling before the coronavirus, was in danger of collapsing. Yellow’s most recent financial statements showed that its liabilities exceeded its assets by nearly $450 million at the end of June. But the company said this week that it expected to repay its debt to the government in full. The loan comes due in September 2024. The uncertainty about whether Yellow’s assets will be worth enough to pay the Treasury Department and private creditors does not surprise lawmakers and legal experts who have long raised questions about the company’s business and the federal loan granted to it.
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In related news, Yellow Corp. will extend negotiations on a bankruptcy loan until next week, seeking to explore at least two alternative loan proposals that would provide $142.5 million in new cash, the company's attorney said in court on Friday, Reuters reported. Yellow filed for bankruptcy on Sunday with a loan offer for that amount from private equity firm Apollo, a senior lender to the company before its bankruptcy. The trucking company said earlier this week it was seeking alternative financing from MFN Partners, an investment firm that owns 41% of Yellow's stock, and Estes Express Lines, a rival in freight trucking. Yellow is continuing to negotiate those offers, and it has received additional loan offers in the past few days, Yellow's attorney Pat Nash told U.S. Bankruptcy Judge Craig Goldblatt at a Friday court hearing in Wilmington, Delaware. Yellow will likely choose one of the loans, which are "much more favorable" than Apollo's initial proposal, by early next week, Nash said.
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