Yellow Submits Final Chapter 11 Plan, Seeks Creditor Deal

Yellow Corp. has filed a final Chapter 11 plan detailing how it will repay creditors and manage its remaining assets following its bankruptcy. The court documents submitted on September 2 indicate that the company's administrators are seeking a 60-day extension to negotiate with unsecured creditors, including pension funds and personal injury claimants. Central States Pension Fund claims are disputed, with the fund asserting Yellow owes about $5 billion due to its inability to continue pension contributions. The tensions with the International Brotherhood of Teamsters, which represented 22,000 employees, contributed to Yellow's abrupt shutdown in July 2023. There are ongoing legal negotiations regarding various claims, including significant WARN Act claims. Despite the bankruptcy turmoil, Yellow’s secured creditors—including the U.S. Department of the Treasury—have already been repaid through asset sales that garnered over $2 billion, including auctions of terminals and rolling stock. The restructuring plan suggests a potential enterprise value of $1.4 billion for Yellow after the issuance of common stock, with claims capped at $750 million. This would facilitate repayment through cash reserves, secured notes, and a rights offering. Major shareholders are supporting this process, aiming to restore some level of functionality after the financial fallout. From a transportation industry perspective, this situation highlights the vulnerabilities of even large carriers like Yellow, especially amid labor disputes and unforeseen external pressures. The ability of Yellow to navigate this complex bankruptcy while addressing stakeholder claims will be crucial not only for its recovery but also for the broader health of the less-than-truckload segment, which already faces stiff competition from stronger players like FedEx and Old Dominion. Such scenarios underline the importance of maintaining good relations with labor unions and adapting to shifting market conditions in an increasingly competitive environment.