Bankrupt trucker Yellow rejects offer to revive operations

Defunct cargo hauler Yellow Corp. rejected a long-shot offer to revive the bankrupt company, a lawyer for the trucking firm said in a letter Thursday.

The long-shot offer to restart operations is unlikely to cover restructuring fees and other costs of the company’s bankruptcy case, according to the letter.

Yellow has been out of business for several months. It’s nearing the end of an auction process that will bring creditors at least $1.9 billion. That could be enough to pay all the company’s bills and still leave something for shareholders, lead bankruptcy attorney Patrick Nash said in the letter, which was seen by Bloomberg News.

Nash sent the letter to a lawyer for Next Century Logistics Inc., an entity backed by the head of the Jack Cooper trucking company, Sarah Amico, a person familiar with the transaction said.

News of the letter was first reported by The Wall Street Journal.

Yellow auctioned off most of its valuable trucking terminals this week, raising money to pay creditors owed more than $1.2 billion. Twenty one bidders will split 128 US properties Yellow owns, according to court papers. The company laid off all of its drivers and began liquidating its trucks and other assets as part of its Chapter 11 bankruptcy filing earlier this year.

As part of the shutdown, Yellow also canceled its trucking contracts. Getting those agreements back is one of the major hurdles to reviving the company, Nash said in the letter. Other barriers include the lack of support from creditors including a $700 million loan from the US Treasury issued during the pandemic. 

“In our view, the bid contemplates a nonviable enterprise that understates start-up costs of a company that has been wholly nonoperational,” Nash wrote.

The case is Yellow Corp. 23-11069, US Bankruptcy Court District of Delaware (Wilmington).