(Associated Press) – It’s a sad Sunday for the nearly century-old American trucking behemoth, Yellow Corp. The firm announced its dive into Chapter 11 bankruptcy protection, its back broken by the weight of massive debt following a flurry of mergers and heated contract discussions with the Teamsters Union.
Right here in a Delaware courtroom, Yellow’s bankruptcy documents reveal a staggering $1 billion to $10 billion in assets and liabilities, and a creditors list that runs over 100,000 names deep.
In an emotional statement released Sunday, Yellow’s CEO, Darren Hawkins (NASDAQ:HWKN), expressed his deep regret, saying, “With a heavy heart, Yellow has to admit that after close to 100 years of service, it’s curtains.”
Born as YRC Worldwide (NASDAQ:YELL), Yellow grew to be one of the big fish in the US trucking industry, particularly shining in the “less-than-truckload” (LTL) segment – where they could bundle freight from several customers in one truck.
From retail giants like Walmart (NYSE:WMT) and Home Depot (NYSE:HD), to manufacturing companies and Uber (NYSE:UBER) Freight, Yellow’s clientele was vast. Yet, some of these customers hit the pause button on shipments, fearing their cargo could be left in limbo if Yellow bit the dust.
Yellow’s bankruptcy move comes hot on the heels of Teamsters’ announcement that the company was winding down operations.
Recent talks with the union over a restructuring plan aimed at efficiency have been quite the tug of war. Yellow just barely dodged a strike from 22,000 workers represented by Teamsters.
Prior to diffusing the strike bomb, Yellow took the battle to the union in a Kansas federal court, trying to nip a strike in the bud. The company claimed that the union’s unwillingness to negotiate pushed it to the edge of oblivion.
Back in June, Yellow pointed fingers at the Teamsters Union for blocking its survival and modernization efforts, collectively dubbed “One Yellow.” The plan was crucial to reschedule about $1.3 billion of debt due by 2024.
Sunday’s statement added, “Coupled with months of negotiation roadblocks, the Teamsters leaders’ relentless campaign against Yellow rattled investors, spooked clients, and left 30,000 jobs hanging by a thread.”
The firm’s crippling liabilities can be traced back to its acquisition of Roadway in 2003 and USF in 2005. As of last year, Yellow’s debt stood at a towering $1.5 billion, as per Refinitiv data.
American taxpayers are now left biting their nails, as they stand to lose big time if Yellow can’t repay the $700 million lifeline handed out by the Trump administration in 2020. This pandemic relief loan was an attempt to rescue the beleaguered and inefficiently run trucking titan.