Posted February 8, 2024
The former Overland Park-based trucking company, Yellow Corp. announced it has repaid the $700 million U.S. Treasury loan through the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Yellow has repaid $700 million in principal, as well as more than $151 million in interest, according to a release Monday. Yellow has fully satisfied its loan commitments under its agreement with the Treasury.
“This repayment demonstrates Yellow’s absolute commitment to fulfilling its promise to the American taxpayers that its CARES Act loan would be repaid in full with interest,” Yellow’s Chief Restructuring Officer, Matthew Doheny said in the release. “At the time the loan was made, the U.S. supply chain was in danger of collapse and Yellow was proud to have secured its CARES Act loan, which helped Yellow preserve its 30,000 jobs, protect the U.S. economy during the height of the Covid crisis, and ensure that our brave men and women in uniform continued to receive the supplies they needed to defend our great nation.” Doheny added that, “despite receiving bipartisan support, Yellow’s CARES Act loan would not have been possible without the leadership of President Trump and Secretary Mnuchin for which Yellow is and remains grateful.”
The Treasury also received 29.6 percent of Yellow’s stock, or, 15.9 million shares. The Treasury’s equity stake is currently worth approximately $72 million.
Yellow officially declared bankruptcy in August 2023. Yellow’s CEO, Darren Hawkins cited the International Brotherhood of Teamsters (IBT) as a contributor to the company’s collapse.
Yellow continues to attribute IBT’s involvement as a factor in the company’s decision to declare its bankruptcy in Monday’s release.
“Yellow’s CARES Act loan helped Yellow make significant progress executing its strategically vital fleet and network modernization efforts that would have enabled Yellow to compete against the non-union carriers that dominate the industry,” Yellow’s counsel, Marc Kasowitz of Kasowitz Benson Torres LLP, said in the release. “All of that progress, however, was destroyed when the International Brotherhood of Teamsters leadership, under the direction of Sean O’Brien, took a militant zero-sum approach to dealing with Yellow that prevented Yellow from completing its network optimization. Just as Yellow kept its promise to the American taxpayers by repaying its CARES Act loan in full, so too will Yellow keep its promise to the 30,000 former Yellow employees who lost their good-paying jobs by seeking redress from the IBT for causing Yellow’s bankruptcy as detailed in Yellow’s breach of contract lawsuit against the IBT.”
“Today’s news is unfortunate but not surprising. 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. This is a sad day for workers and the American freight industry,” Teamsters General President Sean O’Brien said in a release after learning Yellow was ceasing operations.
In December, Yellow sold most of its shipping centers and real estate through a court-approved auction that raised over $1.8 billion for its creditors. It was able to auction off a total of 128 properties the firm owned as well as 2 leased properties for a total of $1.88 million.