The leaders of shuttered Yellow Corp. have postponed the auction of the company’s trucks and trailers and extended indefinitely the deadline for potential buyers to submit bids.
Attorneys for Yellow on Oct. 13 filed notice in Delaware bankruptcy court that “in consultation with the Consultation Parties and in their reasonable business judgement,” executives of the former No. 6 company on the 2023 FleetOwner 500 list of for-hire carriers will reschedule the auction that had been set for Oct. 18. They also have reopened the deadline to submit bids for trucks and trailers—it had been the close of business Oct. 13—and have not yet set a new timeline for the entire process.
Yellow closed its doors in late July after a strike threat from the International Brotherhood of Teamsters, with whose leaders CEO Darren Hawkins and his team had been battling over a new contract, crippled its business. Yellow executives filed for protection from the company’s creditors soon after and launched a process to liquidate its assets. (The company has nearly $1.3 billion in secured debt to repay—about $700 million of which is from the controversial 2020 CARES Act loan Hawkins secured from the federal government.)
Among those assets are roughly 12,000 trucks and 42,000 trailers scattered across the United States. In a court hearing mid-September, an attorney for Yellow said there was “significant interest” in that equipment from both strategic and financial buyers. It’s not apparent why the auction has now been delayed, and Yellow officials did not respond to a request for comment.
Bankruptcy attorney George Singer of Holland & Hart, who is not involved in Yellow’s case, told FleetOwner the postponement isn’t necessarily a dark omen. Such extensions are not unusual in cases such as Yellow’s, he said, and often are provided to give potential buyers more time to conduct due diligence or line up financing—the latter being a possible sticking point for some since interest rates have run up significantly since mid-summer.
“Buyers may not be used to the quick pace” of bankruptcy cases, Singer said. “And Yellow and its bankers want as robust a process as they can get.”
While the auction postponement isn’t a huge red flag, the broader freight environment likely isn’t doing Yellow any favors: A new report from the American Transportation Research Institute has the economy—the combination of weak demand, high fuel prices and rising interest rates contributing to an uncertain outlook—topping the list of concerns among roughly 4,000 industry stakeholders—while ACT Research President Kenny Vieth noted last week that “freight metrics have failed to gain traction.” Those dynamics don’t appear conducive to creating a stampede of possible bidders.
In addition to their rolling stock sales, Yellow executives and their advisors also are taking bids on the shuttered company’s real estate portfolio of roughly 140 terminals around the country as well as other assets such as its intellectual property. The deadline to submit bids for those assets is Nov. 9 and an auction is scheduled for Nov. 28.
Shares of Yellow (Ticker: YELLQ), which now trade over the counter, ended trading Oct. 16 at $1.50, down more than 4% from Friday. At that level, the shell of the company is still being valued at about $78 million but observers consider it unlikely that equity holders—who rank behind owners of Yellow’s secured and unsecured debt as well as other stakeholders—will receive anything for their shares in the final accounting.