A Delaware bankruptcy court ruled Friday that Yellow Corp. could retain real estate broker CBRE to sell its remaining terminals, which include 46 owned and 70 leased locations. Counsel for the debtors also said submission of a final Chapter 11 bankruptcy plan to the court will happen in the coming days, ahead of the expiration of the company’s exclusivity period.
According to Friday testimony, the CBRE request was unopposed by stakeholders to the estate, including the official committee of unsecured creditors, which had previously voiced concerns that the liquidation of the defunct less-than-truckload carrier was too costly and taking too long. Earlier this month, some of Yellow’s (OTC: YELLQ) creditors accused the debtors of dragging out the process, fighting legitimate claims in attempts to garner a recovery for stockholders even though “every conceivable” scenario shows shareholders “are out of the money.”
The estate has incurred more than $100 million in professional fees since the bankruptcy filing a little more than a year ago. On the eve of Friday’s hearing, two law firms representing Yellow filed compensation and expense reimbursement applications with the court totaling more than $3 million for June.
To the credit of Yellow’s handlers, $2 billion in proceeds has been generated from the sale of more than 160 terminals. The estate has also auctioned more than half of its 60,000 pieces of equipment (mostly tractors and trailers). The money has been used to repay all of Yellow’s funded debt and bankruptcy financing. The estate ended July with a cash balance of $352 million, according to a monthly operating report filed with the court.
Yellow’s counsel also said Friday it would submit a Chapter 11 plan to the court before the exclusivity period ends on Sept. 2. Yellow has been able to oversee the liquidation of assets for the past year as competing plans from other financial parties have not been allowed. The court gave Yellow another 90 days to execute its strategy in early June. The unsecured creditors’ committee recently said it may look to block any further extensions if requested.
The retention of CBRE appears to put to rest the formation of a real estate investment trust to manage the remaining properties. Yellow’s attorneys floated that idea at the early June hearing as a potential strategy for maximizing recovery to creditors.
In addition to how much the estate’s remaining assets will fetch, stakeholders are interested to see how the court rules on other pending claims. Pension fund withdrawal liability claims totaling more than $7 billion, stemming from the company’s early withdrawal from the plans, remain before the court. The court will also decide on up to $244 million in WARN Act claims from former employees who say they weren’t given a required 60-day notice ahead of mass layoffs last year.