A going concern bid for the remaining assets of bankrupt Yellow Corp. appears to be back on the table. A ballot sent to local union heads asks members to agree to settle their WARN Act claims against Yellow with the acquiring company, Next Century Inc. The plan would swap the claims for equity in the startup and potentially recall as many as 14,000 former Yellow workers.
Next Century was formed by Sarah Amico, executive chairperson at car hauler Jack Cooper. She previously led two separate efforts to acquire Yellow as a going concern, following the company’s bankruptcy filing in August. The latest offer was rebuffed by Yellow in December.
The ballot, a copy of which was obtained by FreightWaves, references all Yellow operating companies — YRC, New Penn, Reddaway and Holland. If the plan is approved, the Teamsters union would be able to settle the claims on behalf of its members, “contingent on them [Next Century] acquiring assets of Yellow Corporation as [a] going concern.”
The claim was brought against the estate on behalf of workers after Yellow filed for bankruptcy. It alleged the company failed to notify employees 60 days in advance that they were being terminated.
Yellow has maintained in court filings that it was trying to save the business but that conditions deteriorated quickly, leaving it little time to make the required filings. Court documents have shown Yellow’s shipments declined rapidly in the days leading into a planned strike by workers over the company’s missed benefits payments. The strike was ultimately averted when plan administrators agreed to extend health care benefits for employees, but by then the damage was done.
In lieu of their claim against the estate, employees would receive $20,000 in preferred shares with a coupon rate of 7%. Employees not getting hired back by Next Century would have the right to convert those shares to a $9,250 note, which would be repaid in seven installments by the new company, starting in September and ending March 2025.
The vote would not impact priority claims employees have for items like vacation and sick pay.
Sources close to the matter said a Teamsters freight local in Georgia met with drivers from Holland on Saturday to access member interest.
An integral part of Amico’s prior offers included extending the maturity date on a $700 million COVID-relief loan made to Yellow in 2020. Next Century would have assumed that debt as part of a larger financing package to fund the acquisition. Some senators supported the plan, which aimed to rehire roughly 15,0000 of Yellow’s 22,000 Teamsters employees.
Yellow announced Monday it had repaid the $700 million loan along with $151 million in interest. A Thursday filing with a Delaware bankruptcy court showed it had repaid all secured creditors, including the holders of its bankruptcy financing using proceeds from two terminal auctions, which netted nearly $2 billion.
Yellow’s estate is now working to settle unsecured claims, which include pension withdrawal liability claims totaling more than $7 billion, the WARN Act claims and more than 200 personal injury claims.
Through court filings, Yellow has contested the amounts of the withdrawal liabilities, saying that any amount due would be “far below $1 billion.” It claims Central States Pension Funds and other multiemployer pension funds it contributed to are now fully funded following more than $80 billion in distributions from the American Rescue Plan Act of 2021.
It has also said the WARN Act claims are invalid given the company’s sudden closure. A dispute resolution process has been established to settle the injury claims.
An omnibus hearing scheduled for Wednesday is expected to shed light on the status of several of these items.
No update has been provided on the sale of Yellow’s 46 owned and 118 leased terminals, many of which Amico presumably is attempting to purchase. The estate is also in the process of liquidating roughly 12,000 tractors and 35,000 trailers.
Details on Amico’s new financing plan have yet to emerge.
Sources said Yellow and one adviser to the creditors are opposed to the deal. They also said Amico has garnered written letters of support from some large potential customers.
Next Century, the Teamsters and Yellow hadn’t responded to requests for comment at the time of this publication.
JHT
I see a lot of complaining here about someone wanting to put 14k drivers back to work w/seniority they had and what? The only thing of real value for years at that band of thieves were the drivers. If old mgt. is not involved in any way I’ll certainly talk to them. Why not?
Kenny Bullard
Let’s face it, the money that the union officials got from the company was all about them
If anyone of them had of used their heads
they should have taken the money and purchased company stock at the cheapest prices…
The union could have actually been in control of large amounts of the company…
Just a thought from a narrow minded loyal Teamster for 24 years
Eric the Spartan driver.
OBrian is. Hoffa clone. Yes Yellow is mismanaged and destroyed every thing it touched but the IBT caused this by years of selling out its members. Lots of blame to go around for sure but Hoffa needs to go to jail. OBrian needs to grow up and Yellow management needs.a DOJ investigation. Meanwhile, the.lives of nearly 30,000 people have been trampled on by big business and a corrupt union. The government won’t save us. Nothing g in it for them. Let’s move on and do the best we can.
MD
This will never happen, the Teamsters got what they wanted. Most said F it, close the doors, who cares. Now they are all crying the blue’s, “I cannot find a job”, “I miss my job” etc. As you now know O’Brien is a joke, union’s are no longer needed, there are so many government agencies to protect workers, why waste your money on dues to keep these corrupt union officials working ? They could care less about you. O’Brien told all the employees in my terminal, “NO MORE CONCESSIONS, THE TEAMSTERS WILL HAVE JOBS FOR EVERYONE, LET THEM CLOSE THE DOORS.” Where’s the job’s at folks ? What an ass and a BSer. What about the Teamsters pension fund that everyone is complaining about ? Who mismanaged that ? It was not Yellow, it was the Teamsters, why are you blaming Yellow for that and why would Yellow or anyone else in their right mind pay into a retirement fund for employees that never worked for them ? I am sure most employees do not realize what the executive team had to go thru to spend money to improve the company. Everything had to be approved by the lending institutions, the exec’s did not have an open check book, they had to get approval for all monies spent. I am confident there was no mismanagement or corruption, it was the IBT and lack of business that caused the closings. You cannot have more money going out than what you have coming in and the company did not have the resources to pay its responsibilities to the HW&P. They tried to make changes in the operation for over a year only to be met with road blocks from the IBT. How can that be blamed on bad management, they tried and begged for help from the union only to be left with “CLOSE THE DOORS” from O’Brien. So they did just that. Trust me, don’t keep you hopes up, all equipment has been moved to an auction site, is up for sale or has been sold. Most the properties left are either leased and not owned by Yellow or are in the process of being sold. There is absolutely nothing left to start up Yellow, its done and gone, move on and good luck !
TM
Absolutely RIGHT ! Place trust in a company not even formed . Sarah Amico sounds like a person who thinks she is a savior creating around 14k jobs what is it 8k jobs that’s close to 14 k . No plan and wants to give you a piece of paper to get money later . Another bankrupt company taking advantage of employees loooking for closure . Pay the workers what they are due
Trucker chuck
When yrc stopped paying into the health fund, that was the nail in their coffin. How can you continue to work and not have health insurance for you and your family. Sadly the health insurance ended September 30 th, so that left a lot of people scrambling to find coverage. Pension contributions of basically nothing, no health coverage, but wait blame the union for not allowing it to go to a vote, give me a break! Yellow had since 2009 to “right the Ship ” but chose instead to blame the union, the economy, overcapacity and everyone else for their shortcomings! Having jack Cooper attempt to re open terminals is too late, the freight has moved on to other carriers. Discounting freight is what helped close yellow, low cost carriers don’t work. Holland and New penn gave great service before yellow destroyed them, and had one of the best OR ratios in the ltl segment
HollandDutch
There was never a termination, no phone call or letter. In fact I was unable to return my work equipment or key fab to access the building. We couldn’t even get access to check stubs to file for unemployment or assistance. They had cleared the headquarters building out on Friday July 28th (which was my day off- I worked remote originally from one of the acquired companies 10hr shifts Monday-Thursdays) and there was no severance agreement contract for us to sign when they terminated all positions. There was no Severance pay offered in exchange for us as employees to release of claims against the employer either. Meaning nothing stops us from going to the media or filing for punitive damages which I have every intention of doing. They paid back the government but not the employees! We were told to stop taking pickups the week prior so they cannot say that all of it was because the avert strike. Customers didn’t stop calling for quotes or pickups we were not aloud to place them! This was not the first merger that I have undergone, or company I worked for that closed its doors. The other company did the ethical thing by giving me notice, and a severance pay/legally covering themselves. They paid themself out when that rightfully belongs to those of us who were frontline, the drivers and dock workers and terminal employees and customer care who took the hit prior to them closing and it’s clear they knew, I won’t post here but it impacted my daily work conditions and even my supervisor took another position internally just before this all happened. I feel It was obvious they knew more than they were telling us. I had to let my vehicle go, so if you imagine how this impacted 30K people. How did were they able to cash themself out before filing bankruptcy.. there should be consequences.
On the outside looking in
I’m sorry you guys are your own worst enemies!
Here you are beating the Yellow horse to death! You all knew what was going on with Yellow 15-20 years ago! In no way shape or form was Yellow going to turn a profit on paper to ever pay the employees back!
A lot of you are blaming O’Brien with good reason, but truthfully why hasn’t anyone taken a peak at Hoffa? Hoffa made the deals, Hoffa sold the employees out over and over again!! Don’t get me wrong O’Brien is as much a douche bag as the word itself! But again Hoffa created this mess.
Hopefully at some point the Democratic government will step up and say wait a minute we need to get the DOJ to investigate the board of Yellow Corporation when it come to there FIDUCIARY DUTY to its employees!!
After all you guys have been through these past 15 or so years, some of you are sitting there contemplating what another previous bankrupt company is offering? None of which can even possibly be guaranteed?? And to boot they want you to give up whatever chance there is that you recover anything through the warn act, for stock in a company that isn’t even in business? That’s crazy if you ask me!