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Yellow | Why is filing for bankruptcy a bad thing?

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tikitatt12

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I'm truly curious as to what the ramifications are that would make it something they would want to completely avoid. Mostly I wondered this after seeing Delta take the place of YRC on the transport index and seeing that they had gone through bankruptcyand come out on the other side.
I'm pretty clueless on the process, but doesn't it help to get debt off the books? If it means coming out stronger (or at least more stable) why is it this horrible option?
 
Because that automatically VOIDS all contracts with the Teamsters ! They could and would come out of bankruptcies NO-UNION !
tikitatt12 said:
I'm truly curious as to what the ramifications are that would make it something they would want to completely avoid. Mostly I wondered this after seeing Delta take the place of YRC on the transport index and seeing that they had gone through bankruptcyand come out on the other side.
I'm pretty clueless on the process, but doesn't it help to get debt off the books? If it means coming out stronger (or at least more stable) why is it this horrible option?
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We might survive BK, and we might not. We would loose customers. There would be more layoffs. We could come back strong, but no LTL company ever has before. Do you want to take that chance?
 
The Union would still be here, but all contracts would have to be rewritten and approved by the BK judge. The company would fight for more changes in the approved contract. It goes both ways, the Corporate officers would have to get thier salaries approved as well.
 
R-14Driver said:
Because that automatically VOIDS all contracts with the Teamsters ! They could and would come out of bankruptcies NO-UNION !
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Point taken. But why would the companytry to avoid it all costs? It seems like they are trying to push it non-union with everything they have done so far. It seems they are fighting it tooth and nail even though it would release them from all contracts. Seems counter-intuitive.
 
Steaker said:
We might survive BK, and we might not. We would loose customers. There would be more layoffs. We could come back strong, but no LTL company ever has before. Do you want to take that chance?
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I try to leave nothing to chance :) Seriously though I'm not saying they should just do it and be done with it, I just wondered why it was such a bad option.
 
Because my friend the Company knows when things get better there is no group working in the trucking industry better than the teamsters . Look at your non-union companies turn over rate compared to union companies. You have a trained person who will be with your company for the long run .
tikitatt12 said:
Point taken. But why would the companytry to avoid it all costs? It seems like they are trying to push it non-union with everything they have done so far. It seems they are fighting it tooth and nail even though it would release them from all contracts. Seems counter-intuitive.
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When a company files bk, they don't just get to get rid of their debt. The people owed money get first say to all the assets left. The company doesn't just keep all the cash and keep going.:nutkick:
 
A company also needs DIP (Debtor In Possesion) Financing to continue operatins and has to be able to demonstrate that it will be able to be profitable in order to exit bankruptcy. I honestly don't see how YRC could manage either of those feats.

One other impediment, as mentioned in this thread already, is a loss of business. Customers would pull their freight immediately out of fear that a shutdown would leave it stranded somewhere. That's the reason no other LTL has successfully operated in BK... although, Standard Forwarding is doing just that right now.

The union would remain intact, but the contract would be voided and a judge would be setting the new terms. The airlines are a good example of this - their wages, bennies and work rules have been slashed and burned over the years, but they're still union.
 
To avoid bk fire all Roadway managers the only thing they do is write warning letters and fire guys for the dumist bull sh--t . They don't worry about the freight with their out dated computer system . They have no system can't find the freight or what trailer its on I was told by more than one source Chicago Heights has 3000 bills they can't find and rather than find and deliver they lay off , It's no wonder they are sinking with those loosers in charge . Get rid of them and bring back the Yellow freight guys before it's too late .
 
Also, as has been stated a gazillion times before, Chapter 11 (reorganization) bankruptcy for a freight company is different from other types of businesses. Most, if not all, of your customers will be gone once you declare because they don't want their freight stuck in the system. Most of our customers have customers that they are trying to keep happy too. They aren't going to let anything threaten that relationship.
 
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Old School Guy said:
To avoid bk fire all Roadway managers the only thing they do is write warning letters and fire guys for the dumist bull sh--t . They don't worry about the freight with their out dated computer system . They have no system can't find the freight or what trailer its on I was told by more than one source Chicago Heights has 3000 bills they can't find and rather than find and deliver they lay off , It's no wonder they are sinking with those loosers in charge . Get rid of them and bring back the Yellow freight guys before it's too late .
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Wow. Thats something I usually say. I agree. Management does't have to treat members like ::shit:: to do a better job for them. The votes could have been passed if they would stuck with the original Yellow Freight Management, because they actually treated people like a person and not like a piece of ::shit::. It is hard to explain it to the original Roadway members, because being treated like ::shit:: was part of the NMFA, they thought anyway. :biglaugh:
 
tikitatt12 said:
Point taken. But why would the companytry to avoid it all costs? It seems like they are trying to push it non-union with everything they have done so far. It seems they are fighting it tooth and nail even though it would release them from all contracts. Seems counter-intuitive.
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The reason they must avoid bankruptcy is that there is no YRCW after bankruptcy. The service they provide is a commodity, there is no viable "brand" to market afterwards. A hundred other companies provide the same service. Bankruptcy in Yrcw's case will mean liquidation, not reorganization.
 
good point..now they have 1 billion in assets, the banks will eventually get their money..and alot faster than yrc is paying now...

but,if they do bk..they will be history ...think about it...bk was the easy way out...why didnt they just do it instead of all this b s....
 
tikitatt12 said:
I try to leave nothing to chance :) Seriously though I'm not saying they should just do it and be done with it, I just wondered why it was such a bad option.
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Lets say you were going to have "your" kitchen remodeled for 20 grand. Would you hire a contractor who was in chapter 11 and give him a down payment knowing he could shutdown at a moments notice and you lose your deposit and "your" kitchen is a mess? Same thing with a customer putting his freight on a bankrupt carrier. PS: I only know of one carrier, a regional that has ever filed chapter 11(with the pos union's blessing it seemed)and came out of it, non union afterwards of course.
 
Elwood said:
A company also needs DIP (Debtor In Possesion) Financing to continue operatins and has to be able to demonstrate that it will be able to be profitable in order to exit bankruptcy. I honestly don't see how YRC could manage either of those feats.

One other impediment, as mentioned in this thread already, is a loss of business. Customers would pull their freight immediately out of fear that a shutdown would leave it stranded somewhere. That's the reason no other LTL has successfully operated in BK... although, Standard Forwarding is doing just that right now.

The union would remain intact, but the contract would be voided and a judge would be setting the new terms. The airlines are a good example of this - their wages, bennies and work rules have been slashed and burned over the years, but they're still union.
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Thanks for taking the time to explain, those are the answers I was looking for. Tough situation all around.
 
TurboJ said:
Lets say you were going to have "your" kitchen remodeled for 20 grand. Would you hire a contractor who was in chapter 11 and give him a down payment knowing he could shutdown at a moments notice and you lose your deposit and "your" kitchen is a mess? Same thing with a customer putting his freight on a bankrupt carrier. PS: I only know of one carrier, a regional that has ever filed chapter 11(with the pos union's blessing it seemed)and came out of it, non union afterwards of course.
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I see what you're saying. Although it does seem like YRC has been threatening to file for over a year now and there must still be customers willing to ship (albeit less of them) as some are still moving freight.
I wonder how many customers (aside from large ones) even pay attention to what's happening? I think most just look for the lowest rate.
 
Delta is listed as a transport but it hauls people not freight, I beleive they also received help from the feds to come thru their bankruptcy.
 
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