Trucks and trailers being in a YellowCorp center lot, closed after the freight trucking business stopped all operations, in Las Vegas, Nevada, on July 31,2023
Patrick T. Fallon|AFP|Getty Images
The insolvent trucking business Yellow has actually totally paid back a questionable $700 million Covid loan to the U.S. Treasury Department, plus more than $151 million in interest, the business stated Monday.
The statement came almost 2 months after a federal personal bankruptcy judge in Delaware authorized Yellow’s demand to offer the majority of its shipping centers and realty for almost $1.9 billion.
Meanwhile, unsecured financial institutions in the personal bankruptcy case, consisting of staff member pension funds, are looking for billions of dollars in payments from what stays of the business.
“The money Yellow boasts that it’s repaid the federal government is but a fraction of the $5 billion that hardworking Teamsters gave back to this mismanaged company in wage and pension concessions for more than a decade, money that the workers to this day have not seen,” a spokesperson for the Teamsters labor union, which represented Yellow employees, informed CNBC.
“Working people should have been first in line for relief during Yellow’s bankruptcy proceedings,” the union spokesperson stated.
“As a final insult, Yellow’s failed executives gifted themselves millions in bonuses as they walked away from the ashes of a once-great union company. Yellow may have kept its promise to the taxpayers, but it betrayed a loyal workforce. That fact will be its shameful legacy.”
The $1.3 billion in financial obligation that Yellow had coming due this year consisted of the $700 million loan it got in 2020 under the CARES Act, which licensed the Treasury Department to make loans to business that were “critical to maintaining national security” throughout the Covid-19 pandemic.
Top Trump administration authorities pressed Treasury authorities to authorize the loan over the objections of the Defense Department, which figured out that Yellow was not “critical to maintaining national security.”
By mid-2023, as it headed towards personal bankruptcy, Yellow had actually made just one payment on the loan: $230, in July 2021.
In a declaration Monday revealing the loan payment, Yellow’s primary reorganizing officer Matthew Doheny stated, “repayment demonstrates Yellow’s absolute commitment to fulfilling its promise to the American taxpayers that its CARES Act loan would be repaid in full with interest.”
In an evident nod to the debate over the loan, Doheny stated that “in spite of getting bipartisan assistance, Yellow’s CARES Act loan would not have actually been possible without the management of President [Donald] Trump and [Treasury] Secretary [Steven] Mnuchin for which Yellow is and stays grateful.”
Yellow’s management has actually blamed the Teamsters union for a liquidity crisis in 2015, due to the union’s rejection to postpone advantages payments the business owed in 2015 to the Central States PensionFund The union had actually threatened to strike in July if the payment was not made.
Yellow’s legal representative Mark Kaskowitz in a declaration Monday once again blamed the International Brotherhood of Teams management, under Sean O’Brien, for taking a “militant zero-sum approach to dealing with Yellow that prevented Yellow from completing its network optimization.”
In action, the Teamsters spokesperson stated that whenever Yellow “cried poor, our members did the right thing; unfortunately, Yellow continued to pay its executives, and kicked the can down the road, instead of fixing the company.”
“While other unionized companies in the same space, including ABF and TForce Freight, continue to thrive and grow, Yellow’s executives repeatedly and greedily drove this company into the ground,” she stated. “They spent no time trying to find new lenders while they continued to line their own pockets.”
