Automobile Hauler Seeks to Salvage Yellow
November 16th 2023 – A $1 billion bid by Jack Cooper Transport, an asset based carrier specializing in automobile transport for car manufacturers, could be set to halt the liquidation of Yellow. The attempt is being backed by the Teamsters Union whose workers would be rehired as part of the attempt.
There are many skeptics who see the last-minute swoop as set to fail, most notably because the Treasury Department would need to agree to defer repayment of the $700 million COVID-relief loan for many years. This bailout was also not the only debt that Yellow had defaulted on either, and many are doubtful of a resurrected Yellow’s ability to repay those.
The ambitious plan would see $1 billion in liquid revenue provided to pay off secured creditors, offer unsecured creditors shares in the company, and hire back as many of the 22,000 Teamsters members that were left unemployed after the company’s collapse. The carrier would not resume its spot as one of the largest LTL carrier’s in the nation, as the new owners would seek to trim down the company and scale back in order to regroup and grow organically.
Jack Cooper Transport will need to convince the U.S. Bankruptcy Court of their plan’s viability fast; the sale of Yellow’s assets are in full motion amid this week’s Thursday deadline to submit real-estate bids, with land and buildings heading to auction on November 28th. The auction of the land and buildings is expected to raise enough money to cover all moneys owed to creditors, the federal government, and the laid off workers who are still owed wages and benefits.
The company will file a “going concern bid” with the argument that they can resurrect Yellow, and with their bid they will present a framework already agreed with the International Brotherhood of Teamsters. The bid has already received the support of several lawmakers, who have written to Treasury Secretary Janet Yellen urging her to agree to the deferment of the $700 million debt to the Treasury.