Rolling Stock Company Secures $176 Million Investment as Former Employees Await Their Compensation
Yellow Corp, the defunct less-than-truckload carrier, has seen several significant developments in its bankruptcy proceedings.
In a recent turn of events, the International Brotherhood of Teamsters (IBT) announced that the maximum award for eligible workers could equal 60 days of pay, or up to $11,000, per worker. However, it's important to note that claims accrued outside of the six-month window will not be a priority and aren't guaranteed to be paid in full.
The liquidation of Yellow Corp's rolling stock has generated substantial funds. Over the past two years, the company has managed to generate $175.7 million in net proceeds. The portfolio, which included approximately 12,000 owned tractors and 35,000 owned trailers, was sold to various auction houses in October 2023. Unfortunately, as of now, there are no available search results indicating which auction houses signed contracts for the sale of more than 60,000 units from Yellow Corp as listed in the August 2023 bankruptcy filing.
The repayment that employees may receive from Yellow could sit anywhere from a few hundred dollars to $15,150, but not significantly more than that. This repayment is intended to cover unpaid PTO, sick time, and grievance pay. Claims for unpaid health and welfare benefits have been filed separately on behalf of employees.
Yellow Corp had $623 million in cash as of a July monthly operating report. This cash will be used to repay the remaining creditors, including former workers who hold claims.
MFN Partners, Yellow's largest shareholder, remains in opposition to the fourth iteration of a final bankruptcy plan. MFN Partners has already filed an objection to the amended plan, and other creditors have filed joinders to MFN's objection in recent days.
The Worker Adjustment and Retraining Notification Act case was appealed in March, and the IBT is still pursuing an appeal of the Delaware court's ruling that Yellow was not liable for failing to provide employees with advance notice ahead of mass layoffs in July 2023.
In addition to the proceeds from equipment sales, Yellow has sold more than 200 service centers for nearly $2.4 billion. A confirmation hearing has been set for Nov. 5, and the current timeline calls for all objections to be filed with the court by Oct. 22.
It's worth mentioning that the report didn't provide a distribution breakdown for the $60.7 million in commissions, fees, and expenses paid to liquidators, which included Nations Capital, Ritchie Brothers, and IronPlanet.
As the situation continues to evolve, employees and creditors await the court's decision, hoping for a fair resolution to the matter.
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