🗞️ Bankrupt Yellow Reaches Settlement with Pensions Seeking Billions

Yellow Corporation, which shut down in 2023 following labor disputes with its union, has settled with 14 multiemployer pension plans that collectively claimed over $7.4 billion. The pensions ultimately agreed to the lower amounts as potential recoveries from the estate continue to dwindle, with the settlement allowing roughly $1.4-1.5 billion in withdrawal liability claims.

Recent estimates show the estate will have just $600 million to $700 million to satisfy remaining claims, including those from the pensions and former employees.

Yellow had liquidated its assets through bankruptcy sales totaling approximately $2.4 billion in real estate and $176 million in fleet sales, which satisfied secured debt and bankruptcy financing but left limited funds for pension claims.

Key Points

• Settlement involves 14 pension plans with original claims exceeding $7.4 billion
• Central States Pension Fund holds approximately half of the total claim amount
• Yellow expects to distribute $600-700 million to all creditors
• Junior creditors may receive up to $7.4 million from proceeds
• Yellow lost a September appeal challenging pension liability requirements
• The 3rd Circuit Court upheld PBGC regulations preventing use of pandemic relief funds to reduce pension liabilities
• Continued litigation would have cost tens of millions of dollars

Primary Author: Dietrich Knauth

Primary Source: Reuters

Links:

• https://www.freightwaves.com/news/yellow-settles-with-pensions
• https://www.investing.com/news/stock-market-news/bankrupt-yellow-settles-with-pensions-that-sought-billions-4382404
• https://www.marketscreener.com/news/bankrupt-yellow-settles-with-pensions-that-sought-billions-ce7d51dbdb8ff720
• https://www.indexbox.io/blog/yellow-corp-reaches-74-billion-pension-plan-settlement-in-bankruptcy/