An order was entered in a Delaware bankruptcy court Thursday naming less-than-truckload carrier Estes Express Lines’ $1.525 billion stalking horse bid as the winning offer of Yellow Corp.’s portfolio of owned terminals.
Bid protections for Estes were also approved, including a $7.5 million breakup fee and expense reimbursement up to $1.6 million.
Yellow filed for bankruptcy on Aug. 6 after failing to reach terms with its union workers on a proposed change of operations it said was vital to its survival.
Last week Estes submitted the bid, which eclipsed a $1.5 billion offer from rival LTL carrier Old Dominion Freight Line (NASDAQ: ODFL). Estes’ proposal also came with lower bid protections. The carrier kicked off the bidding with an initial offer of $1.3 billion.
“We are pleased to announce that we have been formally approved by the court as the real estate stalking horse bidder,” a representative with Estes told FreightWaves. “We continue to believe our transaction is mutually beneficial to both Estes and the Yellow bankruptcy estate. We look forward to continuing in this process and working collaboratively with the parties in the case, and we appreciate everyone’s continued efforts.”
The bid sets the price floor for Yellow’s service centers. Estes is unlikely to walk away with all 174 terminals as a full sales process will still occur. The bid deadline for the terminals is set for Nov. 9, with an auction expected to take place on Nov. 28 if needed.
A hearing held last week revealed that initial indications of interest for some of the real estate has been as much as two to 11 times appraised value. At the hearing, counsel for Yellow also said that the proceeds from the terminal sales will likely be more than enough to repay all outstanding amounts due to secured creditors.
Yellow’s unsecured claims, however, may garner more interest moving forward. A recent filing with the Securities and Exchange Commission said Yellow’s pension fund withdrawal liabilities could top $6.5 billion.
The International Brotherhood of Teamsters, which represents roughly 22,000 former Yellow workers, was vocal this week, calling for the U.S. Senate to investigate the company’s bankruptcy as a judiciary committee looks more broadly at bankruptcy reform.
Up next on the auction block is Yellow’s owned rolling stock, which includes nearly 12,000 tractors and 35,000 trailers. A deadline for equipment bids has been set for Oct. 13, with an auction set to occur on Oct. 18 if needed.
More FreightWaves articles by Todd Maiden
- Teamsters want Senate investigation into Yellow’s bankruptcy
- Sequential uptick in August Cass data but comps to 2022 fall faster
- Yellow asset sales, bankruptcy financing approved
Ruffslitch
I have yet to hear a Teamster say, “Y’know, maybe we shouldn’t have encouraged the dock to slow-walk every time someone’s feelings were hurt, just to “get back at the man.” Maybe we should’ve called out co-workers who lied about their clock time for dropping & hooking. Maybe we should’ve told the senior yard guys who came in on 6 & 7 punches, claimed the newest hoss tractor, then hid in a corner of the yard to sleep for half of a triple-time shift, that they need to wake up & carry their very expensive weight, or at least let the junior guys, who are actually working, use the good equipment. And those are the very Teamsters attending the post-bankruptcy meetings at union halls everywhere, decrying bad management as the sole reason we went out of business. O’brien & Co. all seem to think this is 1923, not 2023. Management is certainly not blameless. But there’s enough blame to tar & feather plenty of lying, cheating union members out there who give us all a bad name.
JHT
As of this morning I have pictures of Estes rolling into Reddaway (Yellow) yards. I guess they won the bidding.
Funny how all of these folks are blaming the union when it was very simple and these are the FACTS.
Apollo (their financiers) told them they weren’t getting any more refinancing.
They (Apollo) knew that the time was ripe to liquidate score profit not lose anymore and get away from the idiot management that destroyed the company. They got paid off with the $700m “loan” 3 years ago.
After Apollo said no more Yellow (Hawkins) went to the media and desperately said they were almost out of money insuring that the customers would instantly bail. This has been in the works since last year when YELLOW CANCELED the Jan 1st rollout of phase two CHOPS. I read the letter like everyone else. How has this been forgotten?
BUT
It’s over.
Sick of SEAN
Why did the 6 U.S. Senators mail a letter to the U.S. Treasure Department a few days ago asking for the Covid relief loan to be extended so that a creditable buy could purchase and reopen the company doors. Is this some cruel Joke Sean O’BRIEN and his boy Bernie Sanders cooked up to try and make deflect the blame off of where it belongs? Sean you and you alone are to blame for the loss of 30,000 Jobs at Yellow. No one can find work! Now you have you buddy Bernie sending letters getting people’s hopes up they might get there Jobs back. This is cruel!!!! Those jobs are gone thanks to you and they will never come back. You positioned the non-union industry to make a surge and take over of ground you will never get back. Thanks to you ABF will never see a good contract again and T-Force will be fortunate enough to survive. You have singlehandedly destroyed Union trucking!!!!
MD
No fiction on my part, Yellow was trying to negotiate much earlier than UPS, T-Force and ABF. This started with Jimmy Hoffa Jr. prior to 2022 and with O’Brien in late 2022. Upper management was very transparent with the Teamsters and needed to get the agreement done ASAP so that the financing could be put in place before the company would go out of business and the Teamsters ignored it as O’Brien had no intention to negotiate as he was more interested in putting out a tombstone with Yellows name on it. Does that show that he had any intention to work with the company ? Let’s be real here, we all knew what the state of the company was in over the years and if we would not of taken a pay cut the company would have went out of business 10 years ago or more. Many Yellow employees still had good benefits and was able to retire during that period. I can tell you for a fact as I am communicating with x employees, they cannot find better jobs than they had prior to Yellow going out of business, especially with benefits that even come close to what they had. So we can complain all we want about what was given back to the company to save jobs over the years, the truth to the fact is it was still a VERY GOOD JOB that paid well and supported many employees and their families over the years. Lets not forget what New Penn, Yellow, Roadway, Holland and Reddeway did for many Americans over 100 years or so. We seem to be focused on 10 to 15 years of hard times but fail to remember that there was many more good years than bad. If the company had an opportunity to implement One Yellow, I can assure you we would have been able to have many more good years ahead of us. I agree, there were mistakes made by the company but if we all had crystal balls our life would be much easier, I put the FULL blame on O’Brien and Suckerman, we do not live in a socialist society, we are capitalist and it is what it is. We all have choices, choices to work where we want and the jobs we want to do and there is a lot of opportunity in this country. If anyone felt as if they were cheated during the time we took pay cuts, they could have went elsewhere and many did but those who did not, accepted what was negotiated and stayed and to be honest, many new employees carried this company during that period and agreed to come work at Yellow for what was offered.
Dudley Dooright
MD’s comments are part fact and part fiction. It is true that Yellow leadership was driving the change initiative and that it was a necessary change. Most folks I worked with @ Yellow saw the need to change and were supportive of the LOI.
On the side of the company also is the fact that they made a substantial offer to address compensation. The word we got was that Teamsters wanted to redress the issue after the contract dispute with UPS was settled. Teamster leadership asked for a little time but the company kept pushing for immediate negotiations.
What seems to be missing from MD’s missive are the sacrifices we made over a 15 year period by approval of a scaled back hourly wage and a HUGE “temporary” decrease in pension contribution. I say “tempoarary” reduction because the company promised to make it whole again but never, ever, made an attempt to do so.
All told, the problem lies squarely on leadership of both sides. For years Yellow leadership failed to right a listing ship. Mismanagement of revenues, refusal to increase both pricing and performance standards dropped revenues to substandard levels. On the side of IBT is their own President turned despot. Many were the employees who begged locals to send word to Mr O’Brian to meet with Yellow negotiators but the word either fell on deaf ears or never reached him. Which ever the case, the desires of a few VERY vocal minority must have sounded more attractive than the majority of those wanting to remain employed.
Of course, it seems to many of us that Yellow employees were used as political pawns. How else does one explain the chant, “NO MORE CONCESSIONS” quickly followed by a widely disseminated image of a tombstone emblazoned with the words, “Yellow….1924-2023? Seems evidence enough to draw the conclusion that the IBT leadership had no intention of fighting for its constituency.
Freight Zippy
Further proof that Yellow was worth more dead than alive.
Once the Teamsters killed the company we found out the actual value was more than we thought.
Who will the Teamsters kill off next?
MD
Once again we have all these space rocket scientist commenting on why Yellow went out of business. There is one reason and only one reason, SEAN O’BRIEN. It amazes me how these sheep follow the fox and believe all this BS. In the end the company offered the same contract that ABF and T-Force got but it also included the need for change. All these folks that worked for Yellow knew the service was not good and that Yellow was a low cost carrier because of it and change needed to be made. Like any business, if you do not change with the times, you go out of business. Companies have fixed cost and if you do not have the revenue coming in to cover it, you close the doors and that is what happened. Company management from the top down said over and over at many meetings that the employees needed to go to union meetings, call their union halls and the IBT to get them to the table and the employees response was close it down, who cares…..Now they are all crying the blues, you get what you got because you failed to step up. I agree, folks need to be paid a good wage but a company also has the right to make change for what is good for the company as well. The changes the company ask for were NOT concessions, they were needed to make change for the better of the customer, employees and the company. Hey, let the investigations begin, I don’t think that upper management would have anything to worry about, the lending institutions had a heavy hand in all the money spent which anyone who is smart enough to look around knew that Yellow had aged equipment and needed to upgrade and terminals needed a lot of repairs that were getting done. This is not cheap, tractors alone are close to $100,000, so how far would you think all this money would go ? You want someone to blame, blame Sean O’Brien and his posy, who came into our terminal and told everyone that they were not going to approve the change and if Yellow shut the doors, so be it, he would have Teamster jobs for everyone. Here we are 2 months down the road, X employees not finding jobs and blaming the company, you had your chance and you blew it by buying into O’Brien’s B.S. Like I said, O’Brien is a moron, uneducated and has no clue and if he is educated, he must of been sleeping in class. He tries to negotiate by intimidation like the thugs from the old days and that won’t fly today. That is why Hoffa Jr. was successful and was good union leader. He did what he had to do for his members to keep them working with good benefits and understood both sides. You folks that cannot get over the fact that the union sold you out to prove they are tuff guys and won’t bargain with companies fairly will continue to put them out of business like they have in the past. The union will continue to decline as I have spoke to many employees who said they were sold down the road and WILL NOT work for another union company. I don’t blame them, I will leave you with this, want to see where all your retirement money went to, go out to Vegas and get a good look, the Teamsters did well with your retirement money, now that is mismanagement and corruption but I don’t here anyone complaining. You should have steeped up and you spit in the face of those who were trying to keep you working and you have no one to blame but yourself not to mention that the employees should have been able to vote on the company proposal and were not given that option by the union, O’Brien made it for you. Maybe you should look into a class action lawsuit, you are dues paying members who have rights, the union is not a dictatorship…….