Private less-than-truckload carrier Estes Express Lines’ new bid of $1.525 billion for Yellow’s terminals is now the front-runner, court documents revealed on Wednesday, Freight Waves reported. A filing in a Delaware bankruptcy court showed the carrier entered a stalking horse offer eclipsing the $1.5 billion bid made by rival Old Dominion Freight Line. Estes started the bidding war in mid-August when it made a $1.3 billion offer. The motion showed Yellow has designated the Estes offer as the best so far and requested the court to rule on the matter by Sept. 22 to avoid the risk of it being withdrawn. The new bid exceeds all amounts owed to secured creditors. “We are pleased to have been designated as the real estate stalking horse bidder,” a representative from Estes told FreightWaves. “We believe our proposed transaction is mutually beneficial to both Estes and the Yellow bankruptcy estate. We look forward to participating in this process and working collaboratively with the parties in the case and appreciate everyone’s efforts to date.” Estes’ offer also includes “substantially below market” bid protections. It provides a maximum of $9.1 million in total, including a $7.5 million breakup fee and expense reimbursement up to $1.6 million. Read more.
In related news, Yellow paid bonuses totaling about $4.6 million to eight current and two former executives in the weeks before the company went bankrupt with plans to liquidate, according to corporate disclosures in Delaware bankruptcy court. The figure is higher than it would have been had Yellow managed to avoid a sudden bankruptcy filing, Bloomberg News reported. Of the bonuses disbursed, nearly $2 million paid on July 14 were approved by Yellow’s board in June — when the company was in trouble, but before it was considering filing for bankruptcy, according to the person. Yellow’s public feud with a union representing much of its workforce escalated days later when a strike notice prompted the company’s customers to take their business elsewhere, Yellow has said. The remaining bonuses paid on July 31 became necessary, then, as Yellow planned for a bankruptcy filing that would be used to repay creditors and wind down, according to the person, who asked not to be named discussing private deliberations. The company’s fleet of trailers, trucking terminals and other assets — all of which would need to be sold quickly and at the highest prices possible — had previously been valued at roughly $2.1 billion. A fire sale could seriously reduce the prices they fetched. Read more.
