(Reuters) – Burdened with a heavy debt burden, YellowCorp, the nearly 100-year-old American trucking company, filed for Chapter 11 bankruptcy protection on Sunday after a series of mergers and in the wake of tense contract negotiations with the Teamsters union.
The Delaware state court bankruptcy filing lists assets and liabilities of $1 billion to $10 billion, with more than 100,000 creditors.
“It is with great disappointment that Yellow has announced that it is closing after nearly 100 years in business,” Yellow CEO Darren Hawkins said in a statement Sunday.
Yellow, formerly YRC Worldwide, is one of the largest American trucking companies and a dominant player in the “less than truckload” (LTL) segment that moves goods for multiple customers on a single truck.
Its customers include large retailers such as Walmart, Home Depot, manufacturers and Uber Freight.
However, some have paused shipments to the company for fear they will be lost or stranded if the carrier goes bankrupt.
Yellow’s bankruptcy filing comes after Teamsters said late last month that it had received notice that the company was ceasing operations.
The company has been in contentious negotiations with the union over an internal restructuring initiative aimed at boosting efficiency. It recently averted a strike of 22,000 workers represented by the task force.
Before the strike threat was resolved, Yellow sued the union in Kansas federal court, seeking to derail the strike and saying that the union’s refusal to negotiate had pushed the company to “the brink of extinction.”
In June, the company said the Teamsters consortium was blocking restructuring and modernization efforts, collectively known as “One Yellow,” which it said were necessary to Yellow’s survival and its ability to refinance about $1.3 billion in debt due to be paid off by 2024.
“Combined with months of refusal to negotiate, the International Muslim Brotherhood’s (IBT) leaders’ campaign against Yellow has caused severe anxiety among investors, alienated clients, and put 30,000 jobs at risk,” Yellow said Sunday.
Yellow, saddled with liabilities from its purchases of Roadway in 2003 and USF in 2005, reported total debt of $1.5 billion last year, according to Refinitiv data.
American taxpayers face potential losses if the company does not repay a $700 million loan issued by former President Donald Trump’s administration to bail out the long-running and poorly managed carrier in 2020 under a pandemic relief program.
(Reporting by Dietrich Knauth in New York, Priamvada C, Gopi Babu in Bengaluru, Siddharth Kavali in New York, and Lisa Bertlin in Los Angeles; Editing by Sriraj Kaluvella, Dania Ann Topel and Varun HK)
