The $1.88 billion sale of 130 of Yellow’s less-than-truckload terminals was approved by a Delaware bankruptcy court on Tuesday. A revised sale order is expected to be received by the court and entered into record Tuesday afternoon.
“Preliminarily based on what’s represented, this is obviously a tremendous outcome,” Judge Craig Goldblatt said.
The process included more than 400 interested parties completing nondisclosure agreements with 70 qualified bidders taking part in the auction that began Nov. 28. This first wave of terminal sales ends with 21 entities, mostly LTL carriers and their real estate arms, committing to purchase the properties at values that far exceed a prior appraised value of $1.1 billion.
The auction of Yellow’s more than 140 leased terminals is set to resume on Monday with a sale hearing set for Jan. 12. Yellow’s estate is still in the process of selling the remaining 46 owned locations.
Individual acquisition agreements filed with the court show the property closings are expected to occur by Feb. 6, with the allowance of a one-time 30-day extension. However, a recent filing asked the court for a quick approval on the sale so the estate could take advantage of tax benefits and reduce interest expenses. The document showed that closing “at least a portion of the Sale Transactions” before year-end would save the estate $37 million in taxes. Interest expense for a portion of the bankruptcy financing package is costing the estate $230,000 per day.
| Bidder | Terminal count | Purchase price |
| XPO | 28 | $870M |
| Estes | 24 | $248.7M |
| Saia | 17 | $235.7M |
| RAMAR Land Corp. (R+L Carriers) | 8 | $211.5M |
| Terminal Properties, LLC (Pitt Ohio) | 7 | $83.8M |
| Knight-Swift Transportation | 13 | $51.3M |
| ArcBest | 3 | $30.2M |
| A. Duie Pyle | 4 | $29.4M |
| TForce | 2 | $16M |
| Southeast Consolidators | 1 | $8.5M |
| Skylark Logistics | 2 | $8M |
| Z Brothers Trucking | 1 | $4.2M |
| Unis | 2 | $2.4M |
XPO (NYSE: XPO) will spend $870 million for 28 of Yellow’s terminals, a prior filing showed. Its acquisition will also include a leased terminal in Brooklyn, New York, the transfer of which had been contested by the landlord. Yellow’s attorney said on Tuesday the estate will pay $300,000 in costs to cure the lease and make repairs.
XPO recently announced a bridge loan to fund the acquisition. It’s targeting a $585 million private notes offering and seeking $400 million in term loans to repay the bridge and other debt.
Estes, which set the price floor for the process with a $1.525 billion stalking horse bid, is expected to walk with 24 terminals valued at nearly $250 million. Saia (NASDAQ: SAIA) rounds out the top three bidders with an agreement for 17 properties valued at $236 million.
Yellow’s 12,000 tractors and 35,000 trailers were previously approved by the court for sale through auction houses. Those assets could fetch a few hundred million dollars as the middle tiers of that fee structure range from $475 million to $800 million.
Yellow’s liquidation is expected to generate proceeds in excess of the roughly $1.8 billion in debt held by secured lenders and the hedge funds providing bankruptcy financing.
There are approximately 200 potential claims, “substantially all of which allege bodily injury or property damage stemming from automobile incidents involving the Debtors’ trucks and/or drivers,” a recent filing showed. The court was informed Tuesday by Yellow’s counsel that alternate dispute resolution procedures have been established to settle the claims. Prior filings show Yellow has liability insurance commitments, which carry self-retention limits of $6 million.
Yellow recently objected to nearly $6 billion in claims filed by the Central States Pension Fund. Approximately, $4.8 billion of the amount stems from the company’s withdrawal from the pension fund with the remainder tied to unpaid contributions.
Yellow asserts the fund is attempting a “double recovery,” noting that it received $35.8 billion from a federal rescue package for multiemployer pension plans. Yellow said it doesn’t have any withdrawal liability as the fund no longer has unfunded vested benefits. It also said its participation in the fund was terminated by Central States in July when it failed to make required contributions, thus ending its exposure to accruals.
Yellow estimates any exposure to be “far below $1 billion, even if there is withdrawal liability at all.”
A Jan. 22 hearing has been set on the matter.
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JHT
This was a well planned sale long before any of the crap people spewed into the media. The exec’s will pocket millions because killing us off was more profitable to lousy mgt and to their financiers.
Their bills are paid except to the people who sacrificed to keep the doors open.
Timothy Parkhurst
Hopefully us drivers will be paid what they owe us now. We have already filed a class action suit against the estate. They owe me $7700 in unpaid wages.
steven florence
I would love to have the pension they screwed me out of after working almost 23 years. We all know where that $5 billion dollars went on the give back, it’s in somebody’s bank account not mine. Lost about $1,000 a month on my pension because of it. Ever CEO took hundreds of millions of dollars out of that company after they bought roadway which I work for. Roadway was a great company but as you see they took it down.
John Bojarski
I think the Judge owes it to the Yellow Drivers to pay The Teamsters in full. It was their sanctions that kept Yellow in a losing game because of poor management.
Mark Chapman
What a crock. Government bailed out pensions so now we do not have to pay what we contractually agreed to pay plus fines for not making payment. Not to mention the monies they shorted pensions in the Preston, Yellow, Roadway shell game. But they still want for executives on the Yellow money train to get huge payouts. Cry me a river Yellow execs. Nothing but a Ponzi scheme from the start. Not to mention the millions they grabbed from government under false pretenses.
Why do companies think that pension payments agreed to under contract are the first thing to not be paid. The employees bargained in good faith. The Execs agreed to a contract. This loophole should have been closed decades ago when companies were bought and liquidated just to get to pension accounts.
Andy
I still have not received my PTO payment with 132 hours still owed to me. They laid me off on 07/28/23. And the office personal they let after this date got their PTO payments. 23 years of service I should at least get this payment. I filed the claim and no way to check on status nothing. I wasn’t angry before but with past due bills still and Christmas I am angry.
EX YELLOW EMPLOYEE
Freight Zippy
Proof Yellow was worth more dead than alive.
Now these properties will be occupied by well run companies that generate profits and value for shareholders.
Guess posting the meme of Yellow’s Tombstone has its consequences….
John Brennan
Is there a consolidated list anywhere on which entity got which property(ies)?