Geel rejects an offer to restart the truck company

Yellow, the trucking company that shut down operations this summer and filed for bankruptcy protection, on Wednesday rejected a trucker’s bid to buy and restructure its company.

In a letter to the potential buyer, Yellow’s lawyers claimed the bid was “not viable”, saying they had received no indication that the bid had the support of the company’s creditors, including the Treasury Department, that had provided an emergency loan. for the company during the pandemic.

The letter, a copy of which was reviewed by The New York Times on Thursday, also said the plan to revive Yellow underestimated the costs and difficulties of such an effort. The offer would not be “confirmable by a bankruptcy court or in the best interests of Yellow’s stakeholders,” the letter said.

Yellow’s management plans to soon complete its own bankruptcy plan, selling the company’s assets to various buyers. The company this week the results released of an auction in which winning bidders pledged to spend nearly $1.9 billion on 128 terminals, Yellow’s most valuable assets. On December 12, the company plans to seek approval for the sale from a federal bankruptcy judge in Delaware.

The letter is a blow to the bid led by Sarah Riggs Amico, executive chairman of motor carrier Jack Cooper, who proposed acquiring and revitalizing Yellow. Her plan has the support of the International Brotherhood of Teamsters, the union that represents most of Yellow’s employees. She planned to hire back many of those employees and streamline the company’s operations.

Ms. Riggs Amico did not immediately comment on Yellow’s letter.

Her proposal needed the support of the Treasury Department and the Central States Pension Fund, two of Yellow’s largest creditors. For Ms. Riggs Amico’s plan to work, the Treasury Department, a secured creditor, would have to delay repayment of the $700 million it loaned to Yellow in 2020 under the Trump administration, starting next year have to happen. The bid also needed the support of the pension fund, its largest unsecured creditor. Ms. Riggs Amico’s plan offered the fund $500 million in preferred stock in the new company she had hoped to create with Yellow’s assets and employees.

Her plan called for hiring about 15,000 people, about half the number who had worked for Yellow before its leaders closed the company and filed for bankruptcy. Several members of Congress had urged the Treasury Department to consider Ms. Riggs Amico’s plan, saying it could save jobs.

But trucking analysts said it would be difficult to revive Yellow because many of its customers were likely already using other trucking companies. And many of the workers — about 10,000 of them — appeared to have found jobs elsewhere, said Avery Vise, vice president of trucking at FTR, a research firm that focuses on the freight industry.