An attorney representing now-defunct Yellow Corp. said there has been new interest from parties willing to provide the company with bankruptcy financing.
At a Friday hearing in a Delaware court, Yellow (NASDAQ: YELL) attorney Pat Nash said there had been “a number of inbounds from other parties” willing to provide the debtor-in-possession (DIP) financing needed to fund the marketing and sale of the company’s assets. One of those parties has retained counsel.
It was made known at a Wednesday proceeding that less-than-truckload carrier Estes Express Lines and Boston hedge fund MFN Partners, which amassed a more than 40% stake in Yellow’s equity during July, were making offers to provide DIP financing. The offers were said to provide better financial terms as well as more time to liquidate the company’s terminals and equipment than the deal provided by Yellow’s term loan lender, Apollo Global Management (NYSE: APO), at the time of the bankruptcy filing.
Nash said Estes and MFN Partners indicated a “willingness to provide new money on a junior basis,” which is a concern of Apollo’s. Apollo holds first-lien position on a term loan with a $501 million balance. It also has a lien position ahead of the government on the first tranche of a COVID relief loan issued by the Treasury.
Debtor-in-possession financing allows the lenders of new money to take senior lien positions ahead of the existing lenders at the time of the bankruptcy filing.
Nash also said Friday that Estes has provided a term sheet for its proposal.
“As I stand here today, I have optimism that we are going to have one of these parties posting, maybe we’ll have both of these parties posting … willing to put in money on a junior basis on terms and conditions that work for the pre-petition secured parties as well as for the debtors,” Nash said.
He’s hopeful to have a new financing agreement early next week that has “much more favorable” terms than what Apollo offered.
There still appears to be some discrepancy over the term “junior.” Nash said some existing lenders have provided comments on their interpretation, which he has shared with the potential DIP lenders.
During the Friday hearing, one of Apollo’s lawyers reiterated that assets should be sold in a manner that maximizes cash proceeds to the estate and not by means of credit bids, which allow senior-lien holders to use debt owed to them to make offers.
An attorney for MFN said no one should get preferential treatment in the marketing process.
“We want to make sure that whomever is the DIP lender, if it’s MFN or somebody else, that it allows for the estate to have a robust marketing process and doesn’t give a leg up to anyone that’s interested in bidding,” said Eric Winston, an attorney representing MFN Partners.
Yellow filed for Chapter 11 bankruptcy on Sunday with the plan of liquidating assets to pay off lenders. The filing listed $2.15 billion in assets and $2.59 billion in debt. It owns approximately 10,000 doors at 169 terminals, which some are hoping could fetch as much as $200,000 per door.
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Mike P
I remember that back in the 1980’s Roadway alone had 750 operating terminals throughout it’s system. Just goes to show how Yellow destroyed everything in it’s way. Yellow over the years destroyed many well run trucking companies through acquisitions and now it has caught up with them.Time to pay the piper Yellow.
John
Michael
Friday, August 11, 2023 at 9:33 pm
Michael what is happening is they are moving freight from trailers to the dock so customers can come and pick up the undelivered freight. This happening at many/most terminals. Upper management is still employed across the yellow system. They have no dock workers or jockys so they are doing what they can to help out yellows former customers.
Jackie Padova
I feel that Mr. Hawkins should personally apologize to each and every one of us. Standing in the window hiding behind the curtains is not the way this should have happened. They ripped the carpet out from each one of us and left us lying on the floor, injured, as they walked away. No compassion, no empathy and certainly no care. There are many of us struggling out here without a cent to our names because they have NOT paid us yet!!! They skimmed for themselves right off the top but didn’t even have the decency to pay the people who kept the company afloat. No one can get in touch with anyone and I wonder if unemployment can get in touch with anyone. I know we can’t get in touch with human resources to get where we are supposed to be sending the equipment back to. And just in case you get wind of this, we are NOT paying out of our pockets for this equipment to be sent back!!!!!! WE WANT A PREPAID LABEL!!! We hear the compliments on how we worked hard through articles and news. It makes me so angry that he can just walk away. I think his punishment should be to call each of us and hear the struggles he and his company caused us. I want him to hear the tears falling to the ground. As he’s sitting up on his pedestal, there are families losing their homes, not able to put food in their children mouths, not able to get the proper medical coverage because they didn’t pay into it. They will lose their cars, phones, electricity, and heat. This kind of stress causes depression and anxiety. It causes people to argue over the stress causing marriages to end and people to think suicide. He didn’t just turn his back, he disrupted the lives of others because of their POOR financial decisions. It’s always a trickle down effect but the person or people responsible and no NOT THE UNION needs to own it and personally apologize to us. Stop being a coward!