Bankrupt Yellow Corp. said it repaid the $700 million COVID-relief loan it received from the U.S. Treasury in 2020. In addition to the principal amount, it repaid more than $151 million in interest, a late Monday statement read.
The controversial loan was viewed as an unwarranted bailout by some and outside the scope of the CARES Act, which established a lending program to help companies fund near-term liquidity needs associated with lost business from COVID-related lockdowns.
The defunct less-than-truckload carrier qualified for the loan on a carveout provision, allowing companies “critical to maintaining national security” to participate. Shortly after the loan was made, lawmakers and the Treasury and Defense departments squabbled over which party was ultimately responsible for blessing the transaction.
A congressional oversight commission would conclude in 2023 that the loan to Yellow (YRC Worldwide at the time) should not have been made and that it brought undue credit risk to taxpayers.
It was the $400 million second tranche of the loan package that drew the ire of some officials. The first $300 million was set aside for the company to catch up on delinquent pension and health care payments to its Teamsters workforce. However, the second portion of the loan allowed the company to make capital investments by replacing older tractors and trailers.
Treasury did receive a 29.6% equity stake in Yellow, which is currently worth more than $60 million, as part of the collateral agreement.
“This repayment demonstrates Yellow’s absolute commitment to fulfilling its promise to the American taxpayers that its CARES Act loan would be repaid in full with interest,” said Matthew Doheny, Yellow’s chief restructuring officer, who is tasked with unwinding the company’s assets through a Chapter 11 proceeding.
The estate recently auctioned off 153 owned and leased terminals, roughly half of the company’s real estate portfolio, for $2 billion. Most of the buyers were former Yellow competitors.
A Delaware bankruptcy court is overseeing the liquidation, which also includes the sale of 12,000 tractors and 35,000 trailers. That process remains ongoing.
Roughly $900 million in other secured debt and debtor-in-possession financing remains outstanding.
The estate will also have to address numerous unsecured claims, including potential withdrawal liabilities from multiemployer pension funds, penalties for potential WARN Act violations and more than 200 personal injury claims, among other items.
The company said it is still pursuing a $137 million breach of contract lawsuit against Teamsters for blocking proposed changes to modernize how the carrier operates.
Freight Zippy
No one gave anything back, wages were voted on by the union members and agreed to.
Some Teamsters may have voted no but the overall majority voted to accept the wages they worked for.
When folks like Joe say they gave $$$ back that is not true. The Teamster voted for the wages they received.
The industry is much better off without Yellow.
joe firimonte
Unfortunately Anonymous doesn’t know what he’s talking about. Did you work here? Are you ashamed to put your name out there?
The employees gave 5.1 billion dollars back in concessions while Yellow spent like drunken sailors and managed to hand out bonuses like candy.
Before the Union made it personal which I disagreed with Hawkins went out there and told everyone in the world on FOX that if we didn’t bend we were out of business and only had weeks left. So Anonymous, who ran off the customers.
As far as the Union and SOB, they sacrificed Yellow and it’s employees to make a statement to UPS and UAW that they weren’t screwing around and they better cough up or they were striking. The difference between Yellow and UPS and UAW was solvency. The one without the capital went by the wayside and UPS and the UAW bent.
So Anonymous, please get your facts straight before coming on here and making judgements about the employees at Yellow.
Unknown
Interesting company cell phones still work and they owe their employees for PTO and bonus
former white impala
Yellow wasted money everywhere…in fact, they still have former employees with company paid cell phones that haven’t been turned off (as of today)!
JK
Seems odd that the priority is to pay back the government before reconciling with the debtors and former employees, but what do I know?
Alice Repa
I like that it is posted whT the government loan was for and the real fact that Yellow never took care of the pastdue pension and healthcare for the employees. That is the reason the employees stood behind the union. The employee’s are the ones at a loss here. They haD years of give backs and we tossed to the wolves. The are still waiting for what they are due.
Kenneth
You guys blowed the loan money and didn’t pay youremployes their earned vacation and gave the management big bonus corp greed
Anonymous
Again. The teamsters are laying blame on Yellow for its demise. Um. It takes 2. Yes yellow Corporate Greed. And Yes Teamsters themselves. Especially the public Bullying from O’Brien. Was yellow on a downward spiral yes. O’Brien just scared off what customer base yellow had left. Now let’s talk about dock personal and the continuous damaging and losing freight.