Nashville-Based Yellow Trucking Ceases Operations and Files Chapter 11 Bankruptcy to Liquidate
Yellow Corp., the trucking and logistics provider based in Nashville, Tennessee, filed for Chapter 11 bankruptcy relief on August 6, 2023 in the U.S. Bankruptcy Court for the District of Delaware. The filing happened a week after the company halted operations, putting its 30,000 employees out of work.
“It is with profound disappointment that Yellow announces that it is closing after nearly 100 years in business,” CEO Darren Hawkins said in a statement.
The Chapter 11 filing follows years of struggles for Yellow as it tried to address the debt it accumulated through a series of mergers and a $700 million federal Covid-19 relief loan during the pandemic, resulting in the Treasury Department taking a 30% stake in the company.
CEO Hawkins said the business intends to fully pay back the federal loan, which was given to the company in 2020 because of what officials at the time said was Yellow’s crucial role in national security as a transportation provider to the Department of Defense.
Chapter 11 is most often used as a restructuring tool to afford a company breathing room to make decisions, improve cash flow, stockpile cash, and formulate a reorganization plan to right-size debt. But the protections of the automatic stay, and the oversight of the Bankruptcy Court, make Chapter 11 the right vehicle for orderly liquidations, as in the case of Yellow.
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