Yellow Corp. is looking for court approval to back out of more than three dozen leases across the U.S. and Canada as the trucking company's bankruptcy proceedings unfold.
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The 37 leases include truck terminals, offices, warehouses and outdoor storage space for semitrailers, per CoStar. Yellow's corporate headquarters in Nashville, Tennessee, and its regional HQ in Overland Park, Kansas, are among the affected properties.
Mounting debt forced the company to file for Chapter 11 bankruptcy in early August. The business is 94 years old and is the third-largest small-freight trucking company in the U.S., per USA Today.
Yellow has seen its financial obligations accumulate in recent years following the acquisition of Roadway Express and several subsidiaries of USFreightways. As of March, Yellow had about $1.5B in outstanding debt.
Among the company’s creditors is the U.S. government, which issued Yellow a $700M loan as part of a pandemic relief program in 2020. That move has since been labeled a misstep by the Treasury and Defense departments given Yellow’s “precarious financial position at the time of the loan,” according to USA Today.
The company’s 160 truck terminals are headed to auction next month, and much of its debt is expected to be paid down via the sale of those assets. Old Dominion Freight Line has offered $1.5B to acquire the portfolio, which will likely be designated as the minimum bid unless a higher offer emerges ahead of the auction.
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