Trucking firm prepares long-shot bid for Yellow, seeks US Treasury
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[October 30, 2023] By
Jarrett Renshaw
(Reuters) - One of the largest U.S. privately owned auto transport
companies is quietly mounting a long-shot bid - with increasing help
from the Biden administration - to rescue trucking giant Yellow Corp
from bankruptcy liquidation and bring back some 30,000 union jobs,
according to multiple sources familiar with the discussions.
The previously unreported effort by Jack Cooper Transport, a trucking
company that counts General Motors, Ford and Stellantis as its main
customers, has gained steam in recent weeks as the powerful
International Brotherhood of Teamsters union and a bipartisan group of
U.S. senators stepped up their pressure campaign on the Biden
administration.
Yellow filed for bankruptcy protection in August. The piecemeal
liquidation of Yellow's vast trucking and terminal assets could begin
next month, in a deal that is expected to value its real estate at $1.5
billion and its vehicle fleet at hundreds of millions of dollars.
U.S. Senators including Democrat Sherrod Brown, Republican Roger
Marshall and Bernie Sanders, an Independent, asked the Treasury
Department in separate letters reviewed by Reuters to extend the
maturity date for $700 million in COVID pandemic loans given to Yellow
Corp by the Trump administration in 2020, in exchange for the government
taking a stake of nearly 30% in the company.
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The loans currently come due in September 2024. Jack Cooper's bid effort
hinges largely on whether Treasury extends the payback period to 2026,
allowing Jack Cooper to offer more favorable terms for Yellow, because
it would not have to pay the loan back right away.
Jack Cooper officials, including Executive Chair Sarah Amico, have been
talking with Biden administration officials in recent months to get
support for extending the terms of the loan. Amico ran unsuccessfully as
a Democratic candidate for the U.S. Senate in Georgia in 2020.
Those discussions, which include the Teamsters, have ramped up in recent
weeks, sources said.
Lael Brainard, head of the White House National Economic Council, and
Brendan Danaher, the White House's top labor adviser, have received
inquiries about a potential Jack Cooper bid and the White House has been
kept up to date by stakeholders on the effort, the sources said.
The White House said it was referring all Jack Cooper stakeholder
inquiries to the Treasury Department. Treasury had no comment on whether
it was considering a loan extension.
UNION WORKFORCE
"It is unfortunately necessary for Treasury to take these steps to save
tens of thousands of union jobs that have already experienced hardship
due to Yellow’s years of mismanagement," Democratic U.S. senators
including Bob Casey from Pennsylvania and Tammy Baldwin of Wisconsin
wrote.
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![](../../31/images/103023PIX/busine74.jpg)
Semi truck trailers are pictured at freight trucking company
Yellow’s terminal near the Otay Mesa border crossing between the
U.S. and Mexico in San Diego, California, U.S., August 7, 2023 after
the company filed for bankruptcy protection. REUTERS/Mike Blake
![](http://archives.lincolndailynews.com/2023/Oct/30/images/ads/current/graue_lda_BUICK23_101623.jpg)
Treasury is actively looking at whether it can extend the loan,
along with other obstacles, the sources said.
Jack Cooper and the Teamsters union declined to comment.
Any bidder would need to persuade Yellow's largest creditor,
Citadel, and its largest equity holder MFN Partners of the value of
an alternate deal.
Yellow owns approximately 12,000 trucks and 35,000 trailers, along
with hundreds of terminals, according to its bankruptcy court
filing. The company hopes to sell the truck and terminal assets
separately, complicating any effort to purchase the whole company.
The Biden administration has embraced the nation's union workforce
and has tried to drive down inflationary costs associated with
spikes in transport costs, making any deal that keeps trucks and
drivers on the roads politically attractive.
BANKRUPTCY BREAKUP
Yellow, formerly known as YRC, is one of the nation's largest
so-called less-than-truck load carriers in the U.S. Its customers
include Walmart and Home Depot.
The company's bankruptcy filing potentially saddled U.S. taxpayers
with losses from a government rescue of the long-troubled carrier.
Yellow said in its bankruptcy filing it had $2.15 billion in assets
and $2.59 billion in debt, and blamed its collapse on a labor
dispute with the Teamsters union. It terminated about 22,000
union-represented drivers when it went bankrupt. The union has said
the Nashville, Tennessee-based company "mismanaged" its way to
bankruptcy.
Trucking firm Estes Express submitted a revised bid worth $1.525
billion in cash for Yellow Corp's shipment centers, topping a $1.5
billion bid from Old Dominion Freight Line.
(Reporting by Jarrett Renshaw in Philadelphia; Additional reporting
by Dietrich Knauth in New York; Editing by Heather Timmons and
Matthew Lewis)
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