US trucking firm Yellow Corp filed for chapter 11 bankruptcy protection on Sunday and said it would wind down, after struggling with a mounting debt load and following tense contract negotiations with the Teamsters Union.
The nearly 100-year-old company’s bankruptcy filing in a Delaware court estimated assets and liabilities of $1bn to $10bn, with more than 100,000 creditors.
“It is with profound disappointment that Yellow announces that it is closing,” CEO Darren Hawkins said in a statement on Sunday.
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 on Sunday it intends to fully pay back a $700m 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 $1.3bn in debt payments coming due in 2024, including a $567.4m private-equity term loan in June and the US loan in September.
Yellow also has a roughly $450m secured revolving loan from a syndicate of banks arranged by Citizens Bank NA, Merrill Lynch and others that expires in January 2024.
“This leaves the taxpayer the last creditor to get repaid,” said the authors of a Congressional Oversight Commission report issued in June.
Yellow also gave the US treasury 15.9m shares of its common stock as additional security for the loan, the authors said.
Yellow is one of the largest US trucking companies and a dominant player in the “less-than-truckload” segment that hauls cargo for multiple customers on a single truck.
Its customers include large retailers such as Walmart and Home Depot, manufacturers and Uber Freight. Some, however, have paused shipments to Yellow on fears they could be lost or stranded if the carrier went bankrupt.
Walmart does not see a hit from the bankruptcy as it has a diversified transportation network, a source familiar with the matter said last week.
The filing comes after Teamsters said late last month that it was notified that the company was ceasing operations.
Yellow has been in contentious negotiations with the union over an internal restructuring initiative meant to boost efficiency. It recently averted a strike by 22,000 Teamsters-represented workers.
The company on Monday blamed Teamsters for driving it into bankruptcy.
The union has previously said the company had mismanaged itself despite worker concessions and a federal bailout. Teamsters representatives were not immediately available for comment.
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