Bankrupt trucking company Yellow Corp will not seek court approval to borrow $142.5 million from private equity firm Apollo Global Management at a Wednesday court hearing, instead choosing to delay its request to a future court date, Reuters reported. The company, which filed for bankruptcy on Sunday, had planned to seek approval to borrow the first $60 million of a new $142.5 million loan to facilitate an orderly sale of its vehicle fleet and other assets. But a revised agenda published before the hearing indicates that Yellow will discuss the proposed loan in court without seeking approval for any new funding. The proposed loan, if approved, would put Apollo first in line for repayment ahead of the U.S. Treasury Department, which is owed over $700 million on a pandemic bailout loan approved by former President Donald Trump's administration in 2020.
The collapse of one of America’s largest trucking companies is reverberating across the economy, from domestic shipping and real-estate markets to Wall Street, WSJ Pro Bankruptcy reported. Yellow was a $5.2 billion business as recently as last year when it moved around 50,000 shipments a day in a trucking network that made it a fundamental part of the supply chains of hundreds of U.S. companies. The rapid wind-down of its business last month, capped by the shutdown of all operations and a bankruptcy filing in recent days, is leaving behind a trail of winners and losers as the 99-year-old trucker disappears from the highways. The most immediate winners are Yellow’s competitors in the less-than-truckload sector, known as LTL, a segment of the trucking industry that acts as a kind of circulatory system for the goods economy by having trucks carry cargo for multiple customers on the same trailer in fast-paced distribution networks. The clearest losers in Yellow’s demise are the company’s workers, who were laid off, dismissed and locked out of closed terminals and offices last month as the trucker wound down its business. The loss of some 30,000 jobs is the largest at a single company since Boeing at the end of 2020 announced it would cut its workforce by around 30,000 jobs, according to Challenger, Gray & Christmas, an outplacement services firm.
U.S. trucking firm Yellow Corp. filed for chapter 11 protection yesterday and said that it would wind down, after struggling with a mounting debt load and following tense contract negotiations with the Teamsters Union, Reuters reported. The nearly 100-year-old company's bankruptcy filing in a Delaware court estimated assets and liabilities of $1 billion to $10 billion, with more than 100,000 creditors. The collapse of Yellow, formerly called YRC Worldwide, puts about 30,000 workers at risk when the freight industry is already grappling with a slump in volumes. Yellow said yesterday that it intends to fully pay back a $700 million loan former President Donald Trump's administration issued to bail out the long-troubled firm in 2020 under a pandemic relief program. The company has $1.3 billion in debt payments coming due in 2024, including a $567.4 million private-equity term loan in June and the U.S. loan in September.
The collapse of trucking giant Yellow Corp. casts doubt on whether the U.S. government will be able to fully recoup a controversial $700 million loan for an enterprise that was already in financial trouble before the Treasury threw it a COVID lifeline, Bloomberg News reported. The Nashville-based company may be forced to file for bankruptcy soon, after having told workers on Monday that it was shutting down. The decision punctuates the company’s struggle to refinance more than $1 billion of debt maturing in 2024 — almost half of which is held by the government. Now, it’s unclear how much the Treasury Department, which issued the loan in 2020 under the Trump administration, can expect to get back. The government and its agent for the loan, Bank of New York Mellon, may have to fight other creditors in court for whatever assets Yellow has left. Among the other creditors: private equity titan Apollo Global Management Inc., which in 2019 was the lead lender on a $600 million term loan for the company, known at the time as YRC Worldwide Inc.
Yellow, the beleaguered trucking company that received a $700 million pandemic loan from the federal government, notified staff on Friday that it is shutting down and laying off employees at all of its locations, the New York Times reported. The move comes ahead of an expected bankruptcy filing by Yellow in the coming days. The closure of the company would mean the loss of approximately 30,000 jobs and mark the end of a business that just three years ago was deemed so critical to the nation’s supply chains that it warranted a federal bailout. “The company is shutting down its regular operations on July 28, 2023, closing and/or laying off employees at all of its locations, including yours,” the company said. Yellow has been locked in protracted labor negotiations with International Brotherhood of Teamsters over a new contract that the company has said is essential to its ability to move forward with a restructuring plan. 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. Yellow is one of the largest freight trucking companies in the United States, and its downfall could have a ripple effect across the nation’s supply chain. Its impending bankruptcy comes days after United Parcel Service reached an agreement with the union representing more than 325,000 of its U.S. workers, averting a strike. Yellow’s management and union negotiators have been trying to reach an agreement over wages and other benefits but failed to clinch a deal. The fate of Yellow’s assets is not yet clear. 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.
The largest consumer bankruptcy law firm in Illinois and one of the biggest in the country has filed for bankruptcy after taking millions in taxpayer-backed loans meant to help struggling businesses survive the pandemic, the Chicago Sun Times reported. The Semrad Law Firm LLC, which markets itself as DebtStoppers, filed for chapter 11 bankruptcy on April 26 in Delaware — blaming the COVID-19 pandemic. The PPP loans were aimed at small businesses that needed help maintaining their payroll, but court filings show Semrad Law was using paralegals and call center workers in Bulgaria while ultimately cutting its U.S. workforce in half. Its Bulgarian vendor, ZenTeli OOD, is partly owned by the two brothers behind Semrad Law. Records show the law firm received a financial lifeline during the pandemic, obtaining more than $3.8 million in loans through the federal Paycheck Protection Program, launched early in the economic crisis. Patrick Semrad, 44, said the COVID-19 pandemic ravaged the consumer bankruptcy sector, forcing the firm to make the tough decision to file for chapter 11 earlier this year. The law firm went from filing 1,112 cases in June 2019 to filing 486 cases in June 2021, he said. Last month, it filed 632 cases.
Stacks, a three-decade old Burlingame, Calif., breakfast spot with three other locations around the Bay Area, recently filed for chapter 11 bankruptcy. But owner and co-founder Geoffrey Swenson said the business will continue to operate as usual, the San Francisco Business Times reported. Per the June 30 filing in the Northern District of California U.S. bankruptcy Court, the restaurant reported liabilities of more than $1.6 million, a majority of the claims disputed from lawsuits and a partially secured lien. Burlingame was the first location for Stacks, which entered 2020 with five locations around the Bay Area but closed its San Francisco spot in Hayes Valley shortly after shutdown orders were issued for the pandemic. Swenson said yesterday that the bankruptcy filing was a result of losing two restaurants to the pandemic — the San Francisco and the Menlo Park Stacks, the latter sold to a franchisor in 2021 — and that the chapter 11 reorganization is a means to “meet our obligations.” “The business won’t be impacted,” Swenson said. “We’re busier than we’ve ever been.” Swenson and friend Tom Duffy opened the original Burlingame Stacks at 361 California Dr. in 1992, offering comfort breakfast food in ample proportions with pancakes as the star of the show. The restaurant grew over the years to five locations by 2020: San Francisco, Menlo Park, Campbell, Redwood City and Burlingame. The Redwood City and Campbell restaurants had been franchised to Jessica “Yari” Nuñez prior to the pandemic, and Nuñez acquired the longtime Menlo Park spot (open since 2002) in 2021. After the longtime San Francisco outpost in Hayes Valley (501 Hayes St.) shuttered after 13 years in mid-2020, it was taken over by the Hat Trick Hospitality Team — behind The Brixton and Rambler — to become New American restaurant and cocktail bar Hazie's.
