© Reuters. FILE PHOTO: Semi truck trailers are pictured at freight trucking firm Yellow’s terminal close to the Otay Mesa border crossing between the U.S. and Mexico, after the corporate filed for chapter safety, in San Diego, California, U.S., August 7, 2023
(This Nov. 8 story has been corrected to say million, not billion, in paragraph 2)
By Jarrett Renshaw
(Reuters) – Congressional stress is rising on the U.S. Treasury to assist salvage trucking big Yellow (OTC:) from chapter, from Republicans and Democrats alike, letters considered by Reuters present.
Republican Senator Josh Hawley is the most recent lawmaker to ask Treasury, in a letter on Thursday, to increase the phrases of a controversial $700 million pandemic mortgage granted by the Trump administration to Yellow.
It follows separate letters despatched by Republican Senator Roger Marshall and Democrats Sherrod Brown and Bob Casey final month. Earlier this week, Democratic senators Elizabeth Warren and Ed Markey despatched letters.
THE TAKE
Republicans and Democrats pushing Treasury may gain advantage Jack Cooper, one the most important U.S. privately owned auto transport corporations, making its long-shot bid to rescue Yellow from chapter liquidation extra seemingly.
Key to Jack Cooper’s bid is convincing Treasury to increase the mortgage at the moment due on the finish of September 2024 to the identical time in 2026, permitting Jack Cooper to supply extra favorable phrases for Yellow.
NOTABLE QUOTE
“A modification of the compensation phrases will enable Yellow to acquire a purchaser who will maintain its property collectively as a going concern – that’s, maintain it in enterprise as a participant within the trucking sector,” Hawley wrote, noting reviews of such a purchaser.
Making Yellow’s “mortgage compensation phrases extra versatile, is a commonsense step to maintain Yellow’s vans on the street, and maintain its workforce gainfully employed,” he wrote.
CONTEXT
Yellow, previously often known as YRC, is without doubt one of the largest so-called less-than-truck load carriers within the U.S. Its clients embody Walmart (NYSE:) and Residence Depot (NYSE:).
The Biden administration is taking a look at methods the corporate may very well be allowed to proceed to function, urged on by the Worldwide Brotherhood of Teamsters union that misplaced some 22,000 jobs.
Yellow’s property embody 12,000 vans and 35,000 trailers, together with a whole lot of terminals, in keeping with its chapter court docket submitting. It plans to promote the vans and actual property individually.
Yellow mentioned in its chapter submitting it had $2.15 billion in property and $2.59 billion in debt.
WHAT’S NEXT
A last choice by Treasury on whether or not it can lengthen the mortgage is predicted this month, because the chapter proceeds to a possible sale of property.