Yellow rejects plan to revive company as a smaller business after lawyers call the offer made by Jack Cooper Transport “not viable.”
Sarah Riggs Amico, executive chair of Jack Cooper Transport, presented a bid offering to finance the resurrection of a smaller version of Yellow Corp. for $1.1 billion. The plan would have rehired around 30,000 of the workers laid off after the collapse of Yellow. However, since the offer, lawyer for Yellow say that the offer is “not viable” for a variety of reasons.
According to The Wall Street Journal, the bidders failed to secure agreements from Yellow’s creditors to push back debt and accept equity in the new business; failed to gain support from unsecured creditors looking for several billion in pension funds; and did not receive support from the US Treasury Department to defer the repayment of more than $700 million in loans.
Yellow has already auctioned off almost $1.9 billion worth of truck terminals to companies like XPO and Estes Express this month, and expects the continuing liquidations of its properties and assets to bring in funds “overwhelming the value (if any)” of the revival bid from Jack Cooper Transport.
The statement from the lawyers also claims that the bid “understates startup costs” and ”overstates potential revenue and earnings” without considering that former Yellow customers have already switched carriers. ‘
Yellow plans to sell the rest of its terminals in the near future, and thousands of trucks and trailers will be sold by liquidators over the next year.