A going concern bid for the remaining assets of bankrupt Yellow Corp. appears to be back on the table. A ballot sent to local union heads asks members to agree to settle their WARN Act claims against Yellow with the acquiring company, Next Century Inc. The plan would swap the claims for equity in the startup and potentially recall as many as 14,000 former Yellow workers.
Next Century was formed by Sarah Amico, executive chairperson at car hauler Jack Cooper. She previously led two separate efforts to acquire Yellow as a going concern, following the company’s bankruptcy filing in August. The latest offer was rebuffed by Yellow in December.
The ballot, a copy of which was obtained by FreightWaves, references all Yellow operating companies — YRC, New Penn, Reddaway and Holland. If the plan is approved, the Teamsters union would be able to settle the claims on behalf of its members, “contingent on them [Next Century] acquiring assets of Yellow Corporation as [a] going concern.”
The claim was brought against the estate on behalf of workers after Yellow filed for bankruptcy. It alleged the company failed to notify employees 60 days in advance that they were being terminated.
Yellow has maintained in court filings that it was trying to save the business but that conditions deteriorated quickly, leaving it little time to make the required filings. Court documents have shown Yellow’s shipments declined rapidly in the days leading into a planned strike by workers over the company’s missed benefits payments. The strike was ultimately averted when plan administrators agreed to extend health care benefits for employees, but by then the damage was done.
In lieu of their claim against the estate, employees would receive $20,000 in preferred shares with a coupon rate of 7%. Employees not getting hired back by Next Century would have the right to convert those shares to a $9,250 note, which would be repaid in seven installments by the new company, starting in September and ending March 2025.
The vote would not impact priority claims employees have for items like vacation and sick pay.
Sources close to the matter said a Teamsters freight local in Georgia met with drivers from Holland on Saturday to access member interest.
An integral part of Amico’s prior offers included extending the maturity date on a $700 million COVID-relief loan made to Yellow in 2020. Next Century would have assumed that debt as part of a larger financing package to fund the acquisition. Some senators supported the plan, which aimed to rehire roughly 15,0000 of Yellow’s 22,000 Teamsters employees.
Yellow announced Monday it had repaid the $700 million loan along with $151 million in interest. A Thursday filing with a Delaware bankruptcy court showed it had repaid all secured creditors, including the holders of its bankruptcy financing using proceeds from two terminal auctions, which netted nearly $2 billion.
Yellow’s estate is now working to settle unsecured claims, which include pension withdrawal liability claims totaling more than $7 billion, the WARN Act claims and more than 200 personal injury claims.
Through court filings, Yellow has contested the amounts of the withdrawal liabilities, saying that any amount due would be “far below $1 billion.” It claims Central States Pension Funds and other multiemployer pension funds it contributed to are now fully funded following more than $80 billion in distributions from the American Rescue Plan Act of 2021.
It has also said the WARN Act claims are invalid given the company’s sudden closure. A dispute resolution process has been established to settle the injury claims.
An omnibus hearing scheduled for Wednesday is expected to shed light on the status of several of these items.
No update has been provided on the sale of Yellow’s 46 owned and 118 leased terminals, many of which Amico presumably is attempting to purchase. The estate is also in the process of liquidating roughly 12,000 tractors and 35,000 trailers.
Details on Amico’s new financing plan have yet to emerge.
Sources said Yellow and one adviser to the creditors are opposed to the deal. They also said Amico has garnered written letters of support from some large potential customers.
Next Century, the Teamsters and Yellow hadn’t responded to requests for comment at the time of this publication.
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Seesavior allah
Just want to know what I received any money or at least my job back. They left me with nothing.
Timothy maryniak
Amico is trying the same crap Yellow has done to its workers 13 years . Gimmie Gimmie Gimmie . She wants to balance her buying of a bankrupt company yellow on the backs of union workers . Let her go to her mommy and daddy for the money . We gave for 13 years and got shafted . 2/3 rd of pension gone , less than 2rd of pension left for workers . Why does she want to tell us a bunch of crap . There is no call back in seniority or vacations according to years of seniority . Where is her plan ? She works for jack cooper who also went belly up and too often the snake in the grass . Let the court settle this give people what they are owed . Go start up your company Sarah Amico . Go ask your mommy and daddy for money not the union or its workers for you or new century benefit.
A petty
The company was telling consumers don’t call us we can’t pick up your freight take us off your list excel North Carolina. Laying people off and telling people to take a cut in pay? Then giving them selfs a big bonus? Nothing to see here except greed.
Russell Garrett
Yellow’s freight declines where intentional. We were pulling more empty trailers, and the company was hiring new drivers every day and operating driving schools for new drivers. The colaspe of the company had to be intentional, Yellow management should be investigated for corporate crimes.
Craig
First of all DO NOT TRUST THEM. I was one of over 1000 employees that lost 15 percent,a week vacation and 10 years of pension. Sell it all off and make right with ALL past employees. Investigate all board members front CEO down to supervisors
Remember we all trusted these high up people before and look what happen.
Chad Salanoa
I WOULD GO BACK IF THEY WILL HONOR THE SENIORITY LIST BEFORE THE BIG BANKRUPTCY TOOK PLACE AND YEARS OF SERVICE WITH THERE VACATION TIME EARNED WHILE WORKING AT THE TIME ALONG WITH INSURANCE BRNIFITS CLOSE TO WHAT WE HAD .
red viizsla
As a former 30 + year driver for Holland the change from being the number one LTL to a sad stepchild of yellow was a process that collapsed quickly with drivers and management quitting, which would never happen before yellow. having said that it’s time to move on . I have nothing good to say about Obrian’s pompous way he delt with this being less concerned with us than the UPS contract .
George Greer
I’m looking to work for the next century. I hope I’m one of the lucky ones. I’m one of the employees that lost his annual leave. When they closed the door. If you can look me up.