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Yellow | Auction News

These people have been hired to conduct the liquidation auction of Yellow assets.
PRNewswire: Nov. 27, 2023
Irontrax to sell assets from the largest freight bankruptcy in history
Irontrax, a leading appraisal and asset disposition company, is proud to announce its participation in the historic sale of assets resulting from the largest freight bankruptcy in history.
Under the headline "Irontrax to sell assets from the largest freight bankruptcy in history," this groundbreaking development presents a unique opportunity for the trucking industry and the U.S. economy at large.
The demise of Yellow Freight, a once-prominent trucking company, this past summer was attributed to years of poor management, substantial debts, and labor disputes with the Teamsters union.
In its wake, Yellow left behind a nationwide network of 170 truck terminals, 30,000 former employees, and an unparalleled chance for industry rivals to expand their operations.
While other trucking companies have absorbed the daily shipments once handled by Yellow, the sale of these prime properties through bankruptcy opens the door to new possibilities, allowing successful bidders to fast-track their growth.
With an industry segment worth approximately $58.7 billion in 2022 and handling an estimated 720,000 shipments daily, the less-than-truckload (LTL) sector is a crucial component of the U.S. economy, serving as the lifeblood connecting factories, distribution centers, and retail stores.
Irontrax, known for its expertise in facilitating asset sales and disposition of assets, is set to play a pivotal role in managing this historic sale, offering an essential platform for industry players to participate in this once-in-a-generation opportunity.
For further information about Irontrax's involvement in this groundbreaking sale and other inquiries, please contact Joe Santora at (440) 552-1369.
About Irontrax:
Irontrax is a trusted leader in appraisals and asset disposition, serving clients across various industries. With a team of experienced professionals, Irontrax offers tailored solutions to meet the diverse needs of its clients while ensuring transparent, efficient, and profitable asset disposition.
www.irontrax.com

Liquidations - Irontrax

Irontrax is not affiliated with an auction house or any equipment dealership. As a trusted independent resource, we’re better able to focus our attention on risk mitigation when selling or remarketing recovered assets.
www.irontrax.com www.irontrax.com
 
Everything will go on as scheduled until the judge makes a final ruling, answers should be made available at the upcoming court dates or unless there is some type of official announcement of a deal prior to the court hearings.
 
When Yellow abruptly shuttered its operations in the summer and filed for bankruptcy protection, few thought that a buyer would emerge and try to revive the long-troubled trucking giant.

Now a prominent trucking executive has assembled a last-minute plan to acquire Yellow out of bankruptcy — a proposal that seeks not only to rehire many of the company’s employees but also to work with their union, the International Brotherhood of Teamsters, to create a healthy business.

The plan rests on getting the Treasury Department to allow Yellow to postpone repayment of a $700 million rescue loan that it made to the company in 2020. The Treasury may not accept the plan because there are legal obstacles to extending the loan. And it stands to be repaid sooner under the plan that Yellow has already filed in the Delaware bankruptcy court, which involves selling the company’s terminals and other assets to raise hundreds of millions of dollars in cash. Some trucking analysts say reviving Yellow will be hard because many customers will have moved on to other trucking companies that are much better run than the old Yellow.
 
But Sarah Riggs Amico, the trucking executive leading the deal, said that only her plan could bring back thousands of jobs, adding that she had the experience to build a leaner company in partnership with the Teamsters and assemble an executive team that can win back customers.

“Restructuring Yellow provides an opportunity to bring back tens of thousands of fair-wage, union truck-driving jobs while bolstering America’s supply chain,” said Ms. Riggs Amico, the executive chairwoman of Jack Cooper, a private auto-hauling trucking company. “Who wouldn’t find that a worthy effort?”
Under the proposal, Ms. Riggs Amico’s group would extend the Treasury loan so that it would be repaid in 2026 instead of next year, according to a person familiar with the bid. The group would also borrow $1.1 billion to pay off other secured creditors and bankruptcy lenders, and provide the new company with cash to operate. And it would issue $1.5 billion of preferred shares to unsecured creditors — the biggest of which is the Central States Pension Fund — that don’t get all their claims paid in bankruptcy. The Central States fund would get some $500 million of the preferred shares, according to the plan, far less than the $4.8 billion that Yellow owes it.
 
Ms. Riggs Amico’s bid was sent to Yellow’s management on Tuesday. The company must now consider whether to accept the bid. An auction to sell Yellow’s assets, possibly lasting several days, was scheduled to begin Tuesday. Yellow did not respond to requests for comment.
Ms. Riggs Amico and other female executives would own 51 percent of the new company, which would be separate from Jack Cooper. The new Yellow plans to employ some 15,000 people, according to the person familiar with the plan, down from 30,000 earlier this year.
“The Teamsters have a framework agreement to lay the foundation for good union jobs, fair wages and strong benefits once a new company is in place,” Kara Deniz, a Teamsters spokeswoman, said in a statement.

Government labor market data suggest that roughly 10,000 Yellow employees have found jobs elsewhere, said Avery Vise, vice president of trucking at FTR, a forecasting firm that focuses on the freight industry.
That implies that some 20,000 Yellow employees are still looking for work. “I have a lot of friends that are still without jobs,” said Mark Roper, a former Yellow driver from McDonough, Ga., who found a job at another trucking company. “I have a lot of friends that are on the verge of losing their house.”

Sarah Riggs Amico, the trucking executive leading a bid for Yellow, ran in a U.S. Senate primary in 2020.Credit...Alyssa Pointer/Atlanta Journal-Constitution, via Associated Press
Though bringing back lost trucking jobs and resurrecting a unionized company may appear attractive goals to the labor-friendly Biden administration, the Treasury may not believe it has the legal authority to extend the loan — it was made under the CARES Act, passed to provide relief early in the pandemic — and it may have qualms about further backing a company that struggled for years.
 
“There is no clear authority for Treasury to compromise the claim in any way that does not maximize returns for the U.S. government,” said Adam Levitin, a law professor at Georgetown University who specializes in bankruptcy.

In a statement, a Treasury spokesperson said: “Treasury is one of several creditors taking part in the bankruptcy process. We will continue to work to ensure taxpayers, and impacted workers and their families are treated fairly.”
Thomas Nyhan, the executive director of the Central States Pension Fund, said on Sunday that the fund was trying to determine the financial benefit of each plan as the terms of the rescue bid changed. And he said there may be a legal obstacle: The Employee Retirement Income Security Act generally prevents a pension fund from owning securities issued by companies contributing to the fund — the preferred stock under the Yellow rescue plan — though there can be exemptions. “This is a very complicated problem,” Mr. Nyhan said. “We haven’t come to a conclusion, mainly because the deal keeps evolving.”
Members of Congress from both parties have written to the Treasury, urging it to consider extending its loan, including Senators Josh Hawley, Republican of Missouri, and Elizabeth Warren, Democrat of Massachusetts. Mr. Hawley wrote this month that assisting the sale of Yellow to an acquirer was “a common-sense step to keep Yellow’s trucks on the road, and keep its work force gainfully employed.”
The Treasury’s loan came from a pot of money to help companies designated as crucial to national security. It drew scrutiny because of the links between Yellow and the Trump administration, and because the Justice Department had sued the company, accusing it of overcharging the Department of Defense for freight services. Yellow last year agreed to pay a $7 million fine to resolve the case.
Yellow was a big player — another is Old Dominion — in the less-than-truckload sector, in which a truck will carry goods for more than one customer. Companies in the sector often have a network of terminals and warehouses to store goods between shipments and typically travel shorter distances than truckload companies, whose vehicles carry goods for one customer over longer distances.
 
Analysts say Yellow underperformed because it failed to effectively integrate big acquisitions and because it had higher costs, which some attribute in part to the unionization of its work force.
Ms. Riggs Amico, a Democratic primary candidate in Georgia for the U.S. Senate in 2020, has experience restructuring Teamster trucking companies. She oversaw Jack Cooper’s acquisition of two auto-hauling trucking companies with Teamster work forces, and her plan for Yellow envisions hiring executives who specialize in the less-than-truckload business. (Jack Cooper, whose employees belong to the Teamsters, itself filed for bankruptcy in 2019.)
Some of Yellow’s rivals are interested in snapping up its terminals under the current plan in Delaware bankruptcy court. Estes Express has submitted a stalking horse bid — an offer intended to set a minimum price for assets — of $1.53 billion for Yellow’s shipment centers. That sum would provide enough cash to pay off the Treasury and a secured loan of around $500 million now held by Citadel, a Wall Street firm.
Ms. Riggs Amico’s plan would pay off Citadel but ask the Treasury to extend its loan. Some experts say this would mean taxpayers were taking a back seat to Wall Street.
“It’s helping private parties make money off of a distressed-debt investment, and there’s no real reason for Treasury to do that,” Mr. Levitin, the Georgetown professor, said.

Citadel declined to comment.
In Congress, those open to Ms. Riggs Amico’s bid acknowledge that other creditors would be getting ahead of Treasury but think the compromise a necessary evil to save jobs.
 
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