2023-08-10 07:48:05
NEW YORK, Aug 9 (Reuters) – Bankrupt trucking company Yellow Corp (YELL.O) will not seek court approval to borrow $142.5 million from private equity firm Apollo Global Management as scheduled on Wednesday , but will find time to explore alternative debt offers. Said the company’s lawyer.
Yellow has received similar loan offers from MFN Partners, an investment firm that owns 41% of Yellow’s shares, and cargo rival Estes Express Lines, Yellow’s attorney Pat Nash told the US bankruptcy judge. Craig Goldblatt at a court hearing in Wilmington. , del.
Yellow is evaluating those offers while negotiating with Apollo about how those loans would affect Apollo’s security rights on the pre-existing $501 million loan.
Apollo’s proposal included features Yellow “didn’t like,” including higher fees, a 90-day deadline to sell the company’s assets, and veto rights over asset sales “in parts,” Nash said.
Yellow plans to return to the court on Friday with more clarity on which loan to choose. Goldblatt said the competition is encouraging and hopes it will lead to better funding.
Yellow filed for bankruptcy on Sunday with just $39 million in cash, saying it wasn’t enough to execute a months-long bankruptcy sale of 12,000 trucks, real estate and other assets. Nash said the Apollo loan would require Yellow to sell its assets within 90 days, while the other two proposals called for a 180-day sale process.
Yellow attributed its fall to a labor dispute with the International Brotherhood of Teamsters union. The union, which represents nearly 22,000 Yellow employees, said the Nashville, Tennessee-based company was headed for bankruptcy despite worker concessions.
Yellow said it believes both Apollo and the US Treasury Department, which owe more than $700 million in pandemic bailout debt approved by former President Donald Trump’s administration in 2020, can be paid in full.
The United States faces losses on its ownership of 31% of Yellow’s equity shares, which the government secured as collateral for a 2020 loan, audit reports and bankruptcy filings show. Shareholders are often the last to liquidate their investments.
Reporting by Dietrich Noth Editing by Richard Chang
Our criteria: Thomson Reuters Trust Principles.
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