Trucks and trailers are parked on a Yellow Corp site. in Las Vegas, Nevada on July 31, 2023, which closed after the trucking company suspended all operations.
Patrick T. Fallon | AFP | Getty Images
Bankrupt trucking company Yellow has fully repaid a controversial $700 million Covid loan to the U.S. Treasury, plus more than $151 million in interest, the company said Monday.
The announcement came nearly two months after a federal bankruptcy judge in Delaware approved Yellow’s request to sell most of its shipping centers and real estate for nearly $1.9 billion.
Meanwhile, unsecured creditors in the bankruptcy case, including employee pension funds, are demanding billions of dollars in payouts from what’s left of the company.
“The money that Yellow boasts has been paid back to the federal government is just a fraction of the $5 billion that hardworking Teamsters have given back to this mismanaged company in wage and pension concessions for more than a decade, money that the workers have not seen to date.” “A spokeswoman for the Teamsters union, which represents yellow workers, told CNBC.
“During Yellow’s bankruptcy process, working people should have been put first to receive relief,” the union spokeswoman said.
“As a final insult, Yellow’s failed executives gave themselves millions in bonuses as they emerged from the ashes of a once-great union shop. Yellow may have kept its promise to taxpayers, but it betrayed a loyal workforce. It will be like this. It is a shameful legacy.”
The $1.3 billion in debt coming due on Yellow this year included the $700 million loan the company received in 2020 under the CARES Act, which authorized the Treasury Department , to provide loans to companies that were “critical to maintaining national security” during the Covid-19 pandemic.
Senior Trump administration officials urged Treasury Department officials to approve the loan, despite objections from the Defense Department, which noted that Yellow was “not critical to maintaining national security.”
By mid-2023, when the company was on the verge of bankruptcy, Yellow had made only one payment on the loan: $230 in July 2021.
In a statement Monday announcing the repayment of the loan, Matthew Doheny, Yellow’s chief restructuring officer, said: “The repayment demonstrates that Yellow is committed to keeping its promise to American taxpayers that its CARES Act loan will be repaid in full with interest.” becomes.”
In an apparent nod to the controversy surrounding the loan, Doheny said that “Although he had bipartisan support, Yellow’s CARES Act loan would not have been possible without the President’s leadership.” [Donald] Trump and [Treasury] secretary [Steven] Mnuchin, for whom Yellow is and remains grateful.”
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Yellow management blames the Teamsters union for last year’s cash crunch because the union refused to defer benefits the company owed to the Central States Pension Fund last year. The union threatened a strike in July if the payment was not made.
Mark Kaskowitz, Yellow’s attorney, in a statement Monday again blamed the leadership of the International Brotherhood of Teams under Sean O’Brien for taking a “militant zero-sum approach to dealing with Yellow that prevented Yellow from completing its network optimization.” .
In response, the Teamsters spokeswoman said that every time Yellow “cryed foul,” our members did the right thing; Unfortunately, instead of fixing the company, Yellow continued to pay off its executives and throw things into the sand.
“While other unionized companies in the same area, including ABF and TForce Freight, continue to thrive and grow, Yellow’s executives have repeatedly and greedily driven this company into ruin,” she said. “They spent no time finding new lenders while continuing to line their own pockets.”
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2024-02-06 01:06:04
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