Yellow Might Get Loan From Fellow Trucking Fleet to Pay Debts

Estes Express Lines and Hedge Fund Both Offer to Fund Bankruptcy on Better Terms
Yellow trailers
Yellow Corp. trailers are parked at a YRC Freight facility in Richfield, Ohio, July 28. (Sue Ogrocki/Associated Press)

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Yellow Corp. has sparked a bidding war between investment firms and a rival trucker interested in funding the now-shuttered company’s liquidation.

The company is considering replacing an “expensive” bankruptcy loan from lenders led by investing giant Apollo Global Management, Yellow’s lead bankruptcy attorney told the federal judge overseeing its wind-down on Aug. 9. Yellow received multiple last-minute bankruptcy financing proposals prior to its first Chapter 11 hearing, the attorney, Patrick Nash, said.

AUG. 11 UPDATE: Yellow looks to finalize loan by Aug. 15.

Hedge fund MFN Partners — Yellow’s biggest shareholder — and competitor Estes Express Lines have both offered to fund the company’s bankruptcy on better terms, according to Nash. Neither offer is final and Yellow intends to seek court approval of one of the packages on Aug. 11, he said.

Yellow filed for court protection on Aug. 6 after dismissing almost all of its 33,000 workers. The company said it plans to liquidate after facing long-running financial troubles and a dispute with union leaders over a revitalization effort.

The company’s trucking terminals, trailers and trucks should be worth enough to pay off more than $1 billion in secured debt, Nash said. That debt includes more than $700 million owed to the U.S. Treasury for a rescue loan Yellow got during the COVID-19 pandemic.

The two competing lenders “would be doing it a little bit cheaper,” Nash told U.S. Bankruptcy Judge Craig Goldblatt Aug. 9. Apollo and the other lenders in its group have offered a short-term loan that would refinance more than $500 million immediately and place restrictions on its liquidation process, Nash said.


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“We resisted that mightily,” Nash said of the refinancing, known in bankruptcy parlance as a roll-up. The Apollo offer was locked in before the company filed its Chapter 11 case on Aug. 6. Yellow has the option of replacing that financing package if it can get a better offer.

Dennis Dunne, a lawyer representing investment funds managed by Apollo, described the alternative bankruptcy financings under consideration as “uncommitted” proposals that may not come together.

Apollo is concerned that MFN’s proposal could weaken existing lenders’ liens on Yellow’s assets, Dunne said. Apollo hasn’t had an opportunity to review Estes’ offer, which Dunn described as just an expression of interest, but could be an option if a Chapter 11 loan is junior to existing lenders’ liens, he said.

MFN lawyer Eric Winston said the alternative financing his client is offering provides Yellow better economic terms and gives the firm more time to market its terminals and trucks to potential buyers. MFN was also prepared to challenge Apollo’s proposed bankruptcy loan, Winston said.

Estes truck

Yellow's attorney says Estes Express Lines has offered more cash at a lower interest rate. (Clean Energy Fuels Corp.)

Nash said Estes has offered to extend Yellow $230 million, more money than the $142.5 million Apollo has offered, at a better rate. Estes’ proposed loan would carry a 2% lower interest rate than the 17% interest offered by Apollo and the other lenders and carries a lower fee, Nash said.

“We hope that this doesn’t lead to additional delay and degradation,” Dunne said during the hearing, which was conducted by video.

Yellow has faced years of financial stress. The company staved off a bankruptcy filing in 2009 after bondholders agreed to swap debt for equity, only to have to restructure again in 2011.

Yellow Corp. ranks No. 13 on the Transport Topics Top 100 list of the largest for-hire carriers in North America. Richmond, Va.-based Estes Express Lines ranks No. 14. They rank No. 3 and No. 5, respectively, among the largest less-than-truckload carriers.

By Steven Church, Jonathan Randles and Amelia Pollard

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