A beleaguered trucking business that received a $700 million pandemic-era loan from the federal government may be forced to file for bankruptcy protection this summer amid a dispute with its union, a development that could leave American taxpayers stuck with a failed company.
The financial woes at the business, Yellow, which previously went by the name YRC Worldwide, have been building for years. The company lost more than $100 million in 2019 and has more than $1.5 billion in outstanding debt, including the government loan. In 2022, YRC, which ships meal kits, protective equipment and other supplies to military bases, agreed to pay $6.85 million to settle a federal lawsuit that accused it of defrauding the Defense Department.
www.nytimes.com/2023/06/27/business/yellow-trucking-bailout-teamsters.html
YRC employs 12000. Ouch.
www.cnbc.com/quotes/YELL?qsearchterm=
Less-than-truckload carrier Yellow Corp. announced Tuesday that it has filed a $137 million breach of contract lawsuit against the International Brotherhood of Teamsters for blocking proposed changes to modernize how the carrier operates.
Yellow (NASDAQ: YELL) said the union doesn’t have the authority to stop a proposed change of operations, which the company views as the linchpin to its survival. Yellow alleges that union interference has harmed the company to the tune of $137.3 million (“and counting”) in lost adjusted earnings before interest, taxes, depreciation and amortization as well as at least $1.5 billion for a loss in enterprise value that the company “is sustaining and will sustain.”
Yellow’s enterprise value — market capitalization plus net debt — consists mostly of its debt. Yellow’s market cap has plummeted since the end of 2021 as its share price has fallen from more than $14 to roughly $1.
“We do not take this action lightly, but the Union’s leadership has left us with no choice,” Yellow’s management stated in a news release. “For many months, we have made good faith efforts to meet with the IBT to propose a path forward that works for all parties, but they refuse even to meet, let alone engage in honest talks.”
www.freightwaves.com/news/yellow-running-out-of-options-sues-union-for-137m
h/t Oaken Paw