By Jarrett Renshaw
Congressional pressure is growing on the U.S. Treasury to help salvage trucking giant Yellow from bankruptcy, from Republicans and Democrats alike, letters viewed by Reuters show.
Republican Senator Josh Hawley is the latest lawmaker to ask Treasury, in a letter on Thursday, to extend the terms of a controversial $700 billion pandemic loan granted by the Trump administration to Yellow.
It follows separate letters sent by Republican Senator Roger Marshall and Democrats Sherrod Brown and Bob Casey last month. Earlier this week, Democratic senators Elizabeth Warren and Ed Markey sent letters.
THE TAKE
Republicans and Democrats pushing Treasury could benefit Jack Cooper, one the largest U.S. privately owned auto transport companies, making its long-shot bid to rescue Yellow from bankruptcy liquidation more likely.
Key to Jack Cooper's bid is convincing Treasury to extend the loan currently due at the end of September 2024 to the same time in 2026, allowing Jack Cooper to offer more favorable terms for Yellow.
NOTABLE QUOTE
"A modification of the repayment terms will allow Yellow to obtain a buyer who will keep its assets together as a going concern - that is, keep it in business as a player in the trucking sector," Hawley wrote, noting reports of such a buyer.
Making Yellow’s "loan repayment terms more flexible, is a commonsense step to keep Yellow’s trucks on the road, and keep its workforce gainfully employed," he wrote.
CONTEXT
Yellow, formerly known as YRC, is one of the largest so-called less-than-truck load carriers in the U.S. Its customers include Walmart and Home Depot.
The Biden administration is looking at ways the company could be allowed to continue to operate, urged on by the International Brotherhood of Teamsters union that lost thousands of jobs.
Yellow's assets include 12,000 trucks and 35,000 trailers, along with hundreds of terminals, according to its bankruptcy court filing. It fired 22,000 union drivers, and plans to sell the trucks and real estate separately.
Yellow said in its bankruptcy filing it had $2.15 billion in assets and $2.59 billion in debt.
WHAT'S NEXT
A final decision by Treasury on whether it will extend the loan is expected this month, as the bankruptcy proceeds to a potential sale of assets.
(Reporting by Jarrett Renshaw in Philadelphia; Editing by Heather Timmons and Matthew Lewis)
