Trucking Firm Yellow Corp Files For Bankruptcy

Trucking company Yellow Corp YELL has filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code and is closing the business.

The company expects to enter into an agreement, setting forth the terms and conditions of a debtor-in-possession financing facility.

Several years ago, Yellow developed One Yellow business plan to modernize operations to compete with non-union carriers.

In August 2022, IBT (International Brotherhood of Teamsters) leadership approved the first phase of One Yellow in the western U.S. leading to improvement in freight departure time, and enhanced customer service.

However, despite Phase One's approval and success, IBT leadership implemented a nine-month blockade, halting the remainder of Yellow's business plan. 

In 2020, during the peak of the COVID-19 pandemic, the U.S. government loaned Yellow $700 million and the Treasury Department acquired approximately a 30% equity stake in the company.

Also Read: Trucking Firm Yellow Ceases Operations, Risking 30,000 Jobs: Report

On June 26, 2023, Yellow filed a lawsuit against IBT, citing breach of contract and loss of enterprise value.

Yellow is grappling with over $1 billion in debt due next year, which it has found challenging to refinance. 

As a consequence, its cash reserves dropped from $235 million in December to approximately $100 million in June.

"It is with profound disappointment that Yellow announces that it is closing after nearly 100 years in business," said CEO Darren Hawkins.

Yellow has partnered with the American Trucking Associations (ATA) to launch its first searchable job database, specifically for Yellow employees.

With around 30,000 employees, Yellow is the third-largest less-than-truckload carrier in the U.S.

Price Action: YELL shares are trading lower by 42.5% at $2.04 in premarket on the last check Monday.