Yellow Corp Files Bankruptcy
Yellow Corp Files Bankruptcy: U.S. trucking firm Yellow Corp. filed for Chapter 11 bankruptcy protection on Sunday, attributing its financial woes to the Teamsters Union, which it claims drove the company out of business. The nearly 100-year-old company estimated its assets and liabilities at $1 billion to $10 billion and revealed it had over 100,000 creditors.
In response to Yellow’s accusations, Teamsters President Sean O’Brien denied any responsibility and instead pointed to the company’s mismanagement of a $700 million federal loan and mistreatment of its workers. The Teamsters Union has experienced a boost in bargaining power lately, capitalizing on worker shortages and garnering public support.
Yellow Corp Files Bankruptcy: filing comes after Yellow received the $700 million loan
The bankruptcy filing comes after Yellow received the $700 million loan from the former President Donald Trump’s administration as part of the pandemic relief program. The trucking firm has committed to repaying the loan in full and has offered the U.S. Treasury 15.9 million shares of its common stock as additional security for the loan.
Yellow Corp Files Bankruptcy: Formerly known as YRC Worldwide, Yellow Corp. has long been a major player in the “less-than-truckload” segment, handling cargo for multiple customers on a single truck. Among its clientele are major retailers like Walmart and Home Depot, manufacturers, and Uber Freight.
Following last week’s surge, driven by interest from retail investors, Yellow’s stock took a hit on Monday, falling 25% to $2.67. The company managed to avert a strike by its 22,000 Teamster-represented workers. However, some employees are taking legal action against Yellow, claiming the company failed to provide the required 60-day notice before laying them off.
The freight industry has already been grappling with reduced volumes, posing a risk to Yellow’s 30,000 workers, who are now facing potential job losses. While the bankruptcy filing may offer some benefits to the company, its implications could be costly for the employees.
Labor unions have been gaining prominence in the industry, increasing their public visibility and asserting more power. The Yellow Corp. case serves as a stark reminder of the significance of their solidarity, highlighting the far-reaching impact their actions can have on businesses and their workforce.
*Source: Reuters*
