Current Events > US trucking firm Yellow to declare bankruptcy, hasn't repaid $729M covid loans

(+) Yeah! (+)

https://www.reuters.com/business/autos-transportation/us-trucking-company-yellow-shuts-down-operations-wsj-2023-07-30/

Cash-strapped U.S. trucking company Yellow Corp (YELL.O) has ceased operations and is filing for bankruptcy after failing to reorganize and refinance over a billion dollars in debt, the Teamsters Union said on Sunday.

Yellow, formerly called YRC Worldwide, did not respond to a Reuters request for comment.

Earlier this month, Yellow averted a strike by 22,000 Teamsters-represented workers and last week it said it was exploring opportunities to divest its third-party logistics company.

"Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government," Teamsters General President Sean M O'Brien said.

The company was the third-biggest U.S. trucker specializing in the less-than-truckload segment that combines shipments from different customers in the same trailer.

Its customers included large retailers like Walmart (WMT.N) and Home Depot (HD.N), manufacturers and Uber Freight, some of which paused cargo shipments to the company for fear those goods could be lost or stranded if the carrier went bankrupt.

The company said in June that the Teamsters Union was blocking restructuring and modernization efforts, collectively known as "One Yellow", which it said were critical for Yellow's survival and ability to refinance about $1.3 billion of debt due to be repaid by 2024.

Part of that debt is a $700 million pandemic relief loan provided in 2020 by the Donald Trump-led U.S. government in exchange for a 30% stake in the Nashville, Tennessee-based company.

The Wall Street Journal reported the closure of the trucking firm's operations citing notices sent to customers and employees. It reporte on Friday that the company has laid off a large number of non-union workers.

On Monday, another 128 union members at YRC Freight Canada, a unit of Yellow, were told not to report for work.

Apparently they've only repaid $230 of the $729M (yes, you're reading that right) in covid loans they received lmao

Also Trump violated the CARES Act by giving Yellow the loans in question

https://coronavirus-democrats-oversight.house.gov/news/press-releases/clyburn-trump-admin-yellow-national-security-report-covid-oversight

Today, the Select Subcommittee on the Coronavirus Crisis, chaired by Rep. James E. Clyburn, released a staff report that lays out troubling new evidence regarding the Trump Administrations approval of a $700 million loan under the Coronavirus Aid, Relief and Economic Security (CARES) Act program for companies critical to maintaining national security. This loan to trucking company YRC Worldwide Inc. (now named Yellow Corporation) represented 95% of the total funds disbursed under the CARES Act national security loan program. Chairman Clyburn also wrote to the Department of the Treasury (Treasury) Deputy Inspector General Richard K. Delmar to request that the Office of Inspector General investigate whether any of the misleading representations Yellow made in applying for its loan constitute knowing false claims and false statements within the meaning of the False Claims Act, or otherwise violate federal law.

Evidence newly uncovered by the Select Subcommittee shows the company was certified as eligible for the loan despite the assessment of career Department of Defense (DOD) officials that the company was not critical to national securitya requirement under the CARES Act. The loans approval involved the intervention of top Trump Administration officialspotentially including the presidentand its generous terms also violated CARES Act risk and interest rate requirements.

Documents obtained by the Select Subcommittee indicate that, contrary to CARES Act requirements that loans be used to cover pandemic-related losses, Yellow executives sought to use government funds for long-term capital investments to update the companys aging truck fleet. For example, Yellows Chief Financial Officer wrote to a private creditor saying, while we had our hand in the cookie jar we thought we would try to get a little catch up capex [capital expenditures] while we were at it.

lmao that's hilarious lmao

99 years

Bio1590 posted...

Also Trump violated the CARES Act by giving Yellow the loans in question

https://coronavirus-democrats-oversight.house.gov/news/press-releases/clyburn-trump-admin-yellow-national-security-report-covid-oversight

Lock him up

but we can't get $10k in student loan forgiveness

I thought all the PPP loans were forgiven?

Dont think the government is gonna get that money back

Kradek posted...

I thought all the PPP loans were forgiven?

only ones below a certain threshold iirc

DarthAragorn posted...

but we can't get $10k in student loan forgiveness

Kind of a weird tangent in a topic about a company given a loan that they failed to pay back and now they're going under.

Today, the Select Subcommittee on the Coronavirus Crisis, chaired by Rep. James E. Clyburn, released a staff report that lays out troubling new evidence regarding the Trump Administrations approval of a $700 million loan under the Coronavirus Aid, Relief and Economic Security (CARES) Act program for companies critical to maintaining national security. This loan to trucking company YRC Worldwide Inc. (now named Yellow Corporation) represented 95% of the total funds disbursed under the CARES Act national security loan program.

um, what? there's no possible way that can be correct. I know of this company and I see their trucks hardly ever.

"while we had our hand in the cookie jar we thought we would try to get a little catch up capex [capital expenditures] while we were at it.

Take everything their leadership has. Hell when they die even sell their bodies to researchers or something.

My company used to use them

And they started getting pretty unreliable I think late 2021. Yikes.

thronedfire2 posted...

um, what? there's no possible way that can be correct. I know of this company and I see their trucks hardly ever.

That jumped out at me, but as something specific to the "critical to maintaining national security" part of the CARES Act that looks to be true? If you look at the PDF at the bottom of this article and see Appendix E (page 33 of the document, page 44 of the PDF), it shows about $736 million in total loans under this program, $700 million of which went to YRC/Yellow:

https://www.dodig.mil/reports.html/Article/3166964/audit-of-the-dod-certification-process-for-coronavirus-aid-relief-and-economic/

Unsuprised_Pika posted...

Take everything their leadership has. Hell when they die even sell their bodies to researchers or something.

So they still owe $499 million dollars. So if theres like 10 leaders and we say their bodies are worth $50 million dollars after they pass then its a wash!

KaZooo posted...

My company used to use them

And they started getting pretty unreliable I think late 2021. Yikes.

well if I was the owners and got a 700mil loan from the US govt I'd just leave the country

Oh darn, now that we've managed to funnel all the value of this company into our safe, private offshore accounts, we're going to have to file for bankruptcy. :( oh, big sad.
but hey, haha, don't worry! there's this cool, hip new trucking company that we totally don't own and is completely unaffiliated with us, and somehow they already have our old customer list! be sure to hit them up, I'm sure they'll be great business partners :)

So how many Trump admins are directly connected to this company?

It's gotta be a good chunk.

https://www.cnn.com/2023/07/31/business/yellow-corp-closing/index.html

30,000 jobs are now gone.

Thanks trump

How much did the top execs pocket on the way out?

Kradek posted...

I thought all the PPP loans were forgiven?

It's not a PPP loan which is supposed to be for small businesses.

Part of that debt is a $700 million pandemic relief loan provided in 2020 by the Donald Trump-led U.S. government in exchange for a 30% stake in the Nashville, Tennessee-based company.

Monolith1676 posted...

https://www.cnn.com/2023/07/31/business/yellow-corp-closing/index.html

30,000 jobs are now gone.

Thats the most fucked up part of this. 30k now have to search for another company or risk going solo (if they own a truck).

DarthAragorn posted...

but we can't get $10k in student loan forgiveness

You aren't part of the elite