Yellow, the transportation company that shut down operations and filed for bankruptcy this summer, on Wednesday rejected a transportation executive’s offer to buy and restructure its business.
In a letter sent to the potential buyer, Yellow’s lawyers maintained that the offer was “not viable” and said they had not received any indication that the offer had the support of the company’s creditors, including the Treasury Department. who had granted an emergency loan. to the company during the pandemic.
The letter, a copy of which was reviewed by The New York Times on Thursday, also said that the plan to revive Yellow underestimated the costs and difficulties of such an effort. The offer would not be “confirmable by a bankruptcy court or in the best interests of Yellow’s stakeholders,” the letter said.
Yellow’s management intends to soon complete its own bankruptcy plan, which involves selling the company’s assets to different buyers. The company this week. published the results of an auction in which the winning bidders committed to spending almost $1.9 billion on 128 terminals, Yellow’s most valuable assets. On Dec. 12, the company plans to seek approval for the sales from a federal bankruptcy judge in Delaware.
The letter is a blow to the bid led by Sarah Riggs Amico, chief executive of car transport company Jack Cooper, who proposed taking over and reviving Yellow. Her plan is backed by the International Brotherhood of Teamsters, the union that represented most of Yellow’s employees. He intended to rehire many of those workers and streamline the company’s operations.
Ms. Riggs Amico did not immediately comment on Yellow’s letter.
His proposal needed support from the Treasury and the Central States Pension Fund, two of Amarillo’s largest creditors. For Riggs Amico’s plan to work, the Treasury, a secured creditor, would have to postpone repayment of the $700 million it had lent to Yellow in 2020 under the Trump administration, which is due next year. The offer also needed support from the pension fund, the largest unsecured creditor. Riggs Amico’s plan offered the fund $500 million in preferred stock in the new company it hoped to create with Yellow’s assets and employees.
Their plan called for employing about 15,000 people, about half of those who had worked for Yellow before its leaders closed the company and filed for bankruptcy. Several members of Congress had urged the Treasury to consider Riggs Amico’s plan, saying it could save jobs.
But transportation analysts said it would be difficult to revive Yellow because many of its customers were probably already using other transportation companies. And many of its employees — about 10,000 of them — appeared to have found work elsewhere, said Avery Vise, vice president of trucking at FTR, a research firm that focuses on the freight industry.
