Auto hauler Jack Cooper Transport was named by Reuters as a bidder for Yellow Corp. in a deal that would pull the former less-than-truckload carrier from bankruptcy. While described as a “long shot,” the potential transaction is said to be garnering “increasing interest from the Biden administration.”
The Monday report follows recent letters from senators to Treasury Secretary Janet Yellen asking to extend the maturity date on a 2020 COVID-relief loan. The senators said an extension of the maturity date is required to facilitate Jack Cooper’s bid.
“By extending the maturity date of this loan, the interested parties would have the financing for their bid, and retain thousands of high-quality, jobs,” an Oct. 19 letter from Sen. Roger Marshall, R-Kan., stated.
Yellow’s $700 million term loan from the Treasury will mature on Sept. 30.
Details on what assets Jack Cooper would be buying have not been provided. Sen. Marshall’s letter referenced “interested parties attempting to make a ‘going concern’ bid for the company.”
However, Yellow ceased operations in late July and has terminated most of its employees, including 22,000 Teamsters. The company has no revenue-generating operations currently and its assets are set to be auctioned off in the coming weeks.
Further, it remains to be seen how a company of Jack Cooper’s size — 1,200 trucks according to Federal Motor Carrier Safety Administration data — could pull off such a transaction. Yellow’s estate is expected to reel in more than $2.5 billion, which would more than satisfy secured creditors that include the Treasury.
Yellow’s roughly 12,000 tractors and 35,000 trailers were approved Friday by a Delaware bankruptcy court for sale through auction houses. A preliminary $1.525 billion bid has been approved by the court as a starting point for the sale of the company’s more than 170 owned terminals.
The Treasury and a committee of unsecured creditors to the estate were said to have participated in negotiations of the agency agreement with liquidators, a bankruptcy court filing showed.
Jack Cooper is headquartered in Kansas City, Missouri, not far from Overland Park, Kansas, where Yellow was based before relocating executive offices to Nashville, Tennessee, last year. Its employees are also represented by the Teamsters.
Jack Cooper too filed for Chapter 11 bankruptcy. Shortly after filing for bankruptcy protection in 2019 it sold assets to longtime financial partner Solus Alternative Asset Management to reduce more than $300 million of debt. There has been no mention of Solus’ involvement in an offer for Yellow.
“We ask that Treasury indicate to the bankruptcy court that it is in the process of seeking the authority to extend the CARES Act loans which would enable rejoining the currently bifurcated asset at auction,” stated an Oct. 6 letter from Sens. Sherrod Brown, D-Ohio; Bernie Sanders, I-Vt.; and Tammy Baldwin, D-Wis., among others.
Inquiries to Jack Cooper, Solus and Marshall’s office were not responded to by the time of publication.
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LMZ
This is something that has always bugged me, whether it is a union company or not, if a company goes bankrupt, why do the employees who bust their asses, always end up losing, while the big companies that are owed money win. They get paid first. Sure it may not be everything, but it’s more than what the employees will see. They would be lucky if they get enough to live on for another week. The companies could at least write this off on their taxes. What can the employees do? Lose their homes, their vehicles, their way of living and more. In this case, when Yellow took over YRC, they wanted employees to give back to the new company 15% of their income and also they would not contribute anything more to the employee’s pensions but instead they would receive stocks that wasn’t worth crap for the length of their contract. I’m trying to remember what I was told, but I think this happened for two contracts and I don’t think they ever got that 15% back. The company continued to dig themselves further and further in a hole through mismanagement of funds. I thought when Yellow bought YRC, they were biting off more than they could chew, but now they screwed up many lives. Cooper would be an idiot to take this on only to create a mess. I’ve read a lot of negative remarks about union workers, but I know some folks who work for unions and they bust their asses because that is their work ethic. When our generation was younger, we were brought up that when we had a job, we did it. We didn’t screw around. Some people didn’t like that because it made others look bad, but I know if I didn’t finish something my dad said to do, to the best of my ability, he smacked my ass. So I am that way now too. When I do a job, it has to be as close to perfect…. Or what I think is perfect. There are some of us out there that still have that work ethic – union or not. It is insulting to lump all union workers in a group. My son-in-law is in his 30’s and a union worker and is so hard working. He has a family that depends on him. Young or old, union or non-union…they are not all the same. Please remember that when making generalizations.
John
This is a money grab. Award Cooper the Yellow and have the reimbursement of debt to creditor’s all while holding the 700 Million due to the taxpayer.
Think about the one LTL carrier who bid on properties and now the equipment and what monies are still on the street.
John Kopp
A company in bankruptcy buying a company that went bankrupt. What could possibly go wrong.
John F Battista
Jack copper is a failing company that is miss, managed as much as yellow ones and
has debt and they want it to buy a miss managed company that is so stupid there revenue has been decreasing the past five years.
Steve
Are you kidding me then here goes the lawsuits and the money. Lawyers will be the only winners at the end of the mess it will create. The bankruptcy court has already signed off on the liquidation. Jack Cooper doesn’t have the resources to run a company of that size. What a joke.
Mike Pal
The business is gone on to other carriers what is the point ?
Who dat!
I smell corrupt teamsters sniffing around trying to resurrect another failed yellow freight at the expense of the U.S. taxpayers. Give back all this loaned out money to taxpayers then let the yellow freight crybabys do what they want without taxpayer help.
Dick Bischoff
Laughable! Will never happen!