The sale of bankrupt Yellow Corp.’s remaining properties is moving forward, a Wednesday filing in a federal bankruptcy court in Delaware showed. The estate will accept nonbinding indications of interest for its remaining 112 terminals beginning Tuesday and running through Oct. 18.
The court recently allowed Yellow (OTC: YELLQ) to retain real estate broker CBRE to sell the remaining terminals. Yellow will work through the broker and investment banker Ducera to move 47 owned and 65 leased locations, which have been estimated to bring in hundreds of millions of dollars.
The remaining owned locations range in size from as few as eight dock doors (Quebec, Canada) to as many as 426 (Chicago Heights, Illinois). There are a handful of other very large owned terminals in markets like Maybrook, New York (304 doors); Cincinnati (216 doors); and Tennessee markets Chattanooga (198 doors) and Memphis (198 doors). In total, 3,165 doors remain in the owned terminal portfolio.
The remaining leased locations include large facilities like Bloomington, California (325 doors); Kansas City, Missouri (193 doors); Portland, Oregon (178 doors); and Fontana, California (165 doors). The leased portfolio includes 4,109 doors.
The expectation is for property closings to occur in “January 2025 or as soon as practicable thereafter.”
Proceeds from the sales will be used to repay Yellow’s unsecured creditors, which have claims totaling in the billions.
The court recently ruled that Yellow is on the hook for withdrawal liabilities, stemming from its departure from the multiemployer pension plans representing its former employees. The company unsuccessfully argued that the American Rescue Plan Act fully funded the pensions, leaving them with little to no unfunded vested benefits, and Yellow with no liability. The amount of those claims is $6.5 billion, but Yellow has contended it would owe roughly $1 billion by its calculations. The court has instructed the parties to reach a consensus on the amounts owed.
Yellow also owes money to pension plans that didn’t receive the bailout. In addition, it faces claims from former employees who say they weren’t given proper notice ahead of mass layoffs last summer as well as an environmental claim from the Department of Justice.
An August operating statement showed the estate had $345 million in cash.
Yellow began liquidating its more than 300-terminal real estate portfolio and equipment fleet of 65,000 units last year. Less-than-truckload carrier Estes set the stage, backstopping the terminal sales with a $1.525 billion stalking horse bid. Yellow’s estate has moved roughly $2 billion in real estate and half of the equipment since. The funds were used to pay all secured debt.
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