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Yellow Creditors Push Plan to End Bankruptcy Case
Pension Funds, Investors Battle Over Cash Distribution
Creditors of defunct trucking firm Yellow Corp. will submit their own plan in coming days on how to split up the company鈥檚 remaining $550 million of cash and end its bankruptcy case.
Two of the firm鈥檚 biggest pension plans have reached a deal with a creditors committee in efforts to end a long-running court battle with Yellow and its hedge-fund owners, lawyers told the judge overseeing the insolvency case on March 17. That fight has generated tens of millions of dollars in legal fees, according to court records.
No plan has so far garnered sufficient creditor support to proceed. Yellow鈥檚 latest payout proposal doesn鈥檛 have enough votes to do so, Patrick Nash, the company鈥檚 lead lawyer, said during the hearing.
Yellow鈥檚 official committee of unsecured creditors, which represents pension funds and other creditors, plans to file its latest proposal with the bankruptcy court in Wilmington, Del., by the end of this week, said Meredith Lahaie, who is a lawyer for the committee.
The company鈥檚 bankruptcy advisers received the proposal on March 14 and are still evaluating it, according to Nash. No details have been made public and the proposal has not yet been shared with the company鈥檚 biggest shareholders, including MFN Partners.
鈥淚 don鈥檛 know that I can tell you that I am鈥 optimistic, Nash told U.S. Bankruptcy Judge Craig Goldblatt. 鈥淏ut I鈥檓 not pessimistic either.鈥
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Nash said Yellow will try to make a compromise work. 鈥淎ny plan we move forward with that isn鈥檛 supported by MFN and (others) is going to be hotly contested and it鈥檚 going to be heavily litigated,鈥 he added.
Some pensions that didn鈥檛 help negotiate the new proposal fear they will be forced to accept a deal that does not benefit them, Andrew Leblanc, who represents a New York Teamsters pension fund, said during the hearing.
After Yellow filed for bankruptcy and shut down, funds tried to make the trucker pay billions of dollars in penalties for quitting the retirement plans. MFN and the company have spent months in bankruptcy court fighting over the size of any penalties.
Yellow sold its most valuable properties while under court supervision and is in the process of finding buyers for its remaining assets, Nash said during the March 17 hearing. The company has about $550 million in cash that is earning 4% interest annually, he added.
The case is Yellow Corp., 23-11069, U.S. Bankruptcy Court, District of Delaware (Wilmington).
