The freight shipping company that declared bankruptcy in August following a labor dispute, has been granted approval by the U.S. bankruptcy court to sell its extensive vehicle fleet by October. The company also plans to continue marketing its valuable real estate assets, which have already attracted a significant bid of $1.525 billion.
Yellow Corp’s bankruptcy court filings reveal ownership of approximately 12,000 trucks and 35,000 trailers, with an October 13 bid deadline set for these assets. The company has received a strong response from potential buyers, with numerous parties expressing interest and conducting on-site inspections.
Yellow Corp aims to hold an auction for the vehicles by October 18 and secure court approval for the sale on October 27.
While the process for selling real estate assets is expected to take longer, with a November 9 bid deadline, Yellow Corp anticipates seeking court approval for this sale in December. This delay allows for increased competition for the company’s 300 shipping terminals and other real estate holdings, which have generated substantial interest from potential buyers.
Rival shipping company Estes Express Lines initially offered $1.3 billion for the real estate early in Yellow Corp’s bankruptcy proceedings. However, this offer was surpassed by a $1.5 billion bid from Old Dominion Freight Line. Estes Express Lines has submitted a revised bid, providing ample funds to cover Yellow Corp’s pre-bankruptcy debt, including the $700 million owed on a U.S. Treasury Department bailout loan.
In addition to the real estate sale, U.S. Bankruptcy Judge Craig Goldblatt has granted final approval for a bankruptcy loan of up to $212 million, extended by hedge fund Citadel and equity investor MFN Partners. This financial support will give Yellow Corp the necessary time to secure the best possible bids for its assets.
Yellow Corp attributes its bankruptcy to a labor dispute with the International Brotherhood of Teamsters union. During the bankruptcy process, the company terminated approximately 22,000 union-represented drivers. The union contends that the company’s bankruptcy resulted from mismanagement rather than the labor dispute.
This development marks a crucial step in Yellow Corp’s restructuring efforts, as it navigates through bankruptcy proceedings to stabilize its financial position and move forward in the freight shipping industry.