An order was entered in a Delaware bankruptcy court Thursday naming less-than-truckload carrier Estes Express Lines’ $1.525 billion stalking horse bid as the winning offer of Yellow Corp.’s portfolio of owned terminals.
Bid protections for Estes were also approved, including a $7.5 million breakup fee and expense reimbursement up to $1.6 million.
Yellow filed for bankruptcy on Aug. 6 after failing to reach terms with its union workers on a proposed change of operations it said was vital to its survival.
Last week Estes submitted the bid, which eclipsed a $1.5 billion offer from rival LTL carrier Old Dominion Freight Line (NASDAQ: ODFL). Estes’ proposal also came with lower bid protections. The carrier kicked off the bidding with an initial offer of $1.3 billion.
“We are pleased to announce that we have been formally approved by the court as the real estate stalking horse bidder,” a representative with Estes told FreightWaves. “We continue to believe our transaction is mutually beneficial to both Estes and the Yellow bankruptcy estate. We look forward to continuing in this process and working collaboratively with the parties in the case, and we appreciate everyone’s continued efforts.”
The bid sets the price floor for Yellow’s service centers. Estes is unlikely to walk away with all 174 terminals as a full sales process will still occur. The bid deadline for the terminals is set for Nov. 9, with an auction expected to take place on Nov. 28 if needed.
A hearing held last week revealed that initial indications of interest for some of the real estate has been as much as two to 11 times appraised value. At the hearing, counsel for Yellow also said that the proceeds from the terminal sales will likely be more than enough to repay all outstanding amounts due to secured creditors.
Yellow’s unsecured claims, however, may garner more interest moving forward. A recent filing with the Securities and Exchange Commission said Yellow’s pension fund withdrawal liabilities could top $6.5 billion.
The International Brotherhood of Teamsters, which represents roughly 22,000 former Yellow workers, was vocal this week, calling for the U.S. Senate to investigate the company’s bankruptcy as a judiciary committee looks more broadly at bankruptcy reform.
Up next on the auction block is Yellow’s owned rolling stock, which includes nearly 12,000 tractors and 35,000 trailers. A deadline for equipment bids has been set for Oct. 13, with an auction set to occur on Oct. 18 if needed.
More FreightWaves articles by Todd Maiden
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Troe Green
This country is supporting a war that has nothing to do with America, while 22.000 hard working America are left to figure it out.
Where is the relief funds for us? Some of us are losing homes, some need medical insurance coverage. Good hard working men and women screwed by corporate greed. And now you tell us we are at the bottom of the list of people to be paid after the bidding is over. This is real bs.
JHT508
The spin this guy puts on Yellows absolute failure is rich. Obviously the c suite looks out for each other.
Those of us who worked there had a front row view of corrupt cocksure ignorance at it’s most arrogant.
Management above the terminal level seemed clueless and surprised regarding everyday operations. You received no direction from them ONLY instruction. People heard this one a lot when asking for help, “just get it done.’ Often doubling down on a bad idea, again. Or, “that’s the way we’ve always done it.”
That’s what killed the company. The financial part they’re just lying about.
Teamster employees gave back appx $3.5-4 billion in wage and benefit concessions over 10 years because we were otherwise shutting down over $1.5B of debt.
Yellow gets $700M from the Feds because they are going down because of wait for it… $1.5B in debt.
Yellow sends a letter to the Teamsters in December of ’22 stating that the company is not going to implement the “One Yellow” through the rest of the company as planned first of the year. They wrote that they didn’t see the rollout in the east until late spring but “probably summer” and that they have some issues to work out with phase one of one yellow in the west first. The change of Ops in the West was a massive failure. I’d be glad to go over that point by point with ANYONE.
Not a word until March when they send out a letter demanding concessions now or we are going to shut down. Then thats what the idiot kept saying in the press that if they dont get their way we will have to shut down. It was already over by then but he guaranteed it when he ran off the rest of the customers. They knew they weren’t getting their financing and they were running out of money a year early. This bankruptcy was planned and the execs will be lauded for how well they ran this planned bankruptcy.
So on July 30th they shut down because of, oh yeah, the same $1.5B in debt they’ve had for 15 years.
I’m happy to let the investigations fly and see what turns up. If nobody goes to jail for the kind of stuff that was pulled that would be a crime.
Anthony
What a lot people don’t know,doing the the first belly up market crash in the mid 2000s ,Estes was buying a lot of Yellow Roadway Terminals and leasing it out back to them
Jerry Lusk
Not the reason they closed. They wasted 15 billion dollars in concessions from the workers to pay a 1.5 billion dollar debt. They received 77000000 million from the government to bail them out after the concessions. Piss poor management closed yellow. Executives received right at 4.8 billion last week and 2 of them didn’t work for Yellow anymore.
©_©
Estes bought NEMF and I seen Eastern Freightways on the ball /New England motor freight drivers driving Estes trucks
JP Michaels
What do the former employees get out of this? Or is it to some extend a payout to the soon to be former executives?
Lou
Pay employees the $$$ they are owed!
Mark Rasmussen
Nothing but a ripoff. Pure and simple. Teamsters should be the first ones on the list to be paid. Execs should be on the bottom of the list. Nothing but a bunch of thieves. All bills should be paid before the management.