We spoke about a week ago concerning the Sarah Riggs Amico plan to revive Yellow Freight.
In the interim, Yellow held an auction to sell their trucking terminals. About a dozen firms snagged some (75% or about 130) of the Yellow terminals. The total sale price about $ 1.9 billion (not a bad total out of the $2 billion Yellow hopes to raise to close up shop). The bankruptcy court will be reviewing these bids and should approve or deny them on 12 December (tomorrow).
The big buyers were XPO (now the third largest LTL carrier), which acquired 28 of them for $ 870 million. Estes, which hoped to snag them all with a bid of $1.525 billion, actually acquired 24 for a total cost of $249 million. Sala acquired 17 for a cost of $236 million.
Obviously, if these sales go through, the Amico plan has no chance to proceed. The takeover plan has no chance to succeed without the terminals.
But, there are other impediments to the Amico plan. First- Yellow Freight objected to it in its entirety (saying it was not viable- the unsecured creditors have not signed on; the deferred payment to the Treasury requires a special approval for extending the terms of the loan), and that is why they went ahead with the sale of the terminals. This was disclosed in a letter to sent to the lawyers for Next Century Logistics Inc, the company that Amico set up to take over the defunct carrier.
And, then, there’s the fact that many of Yellow’s freight customers have already sought out and engaged with previous Yellow competitors. Getting those customers back requires some substantial marketing efforts.
The table below summarizes Yellow Freight’s objections.
When a suitor’s plan for a bankrupt entity is rejected, the suitor can appeal to the bankruptcy court for a different result. That generally does NOT work, however. This is why Next Century is going to the secured creditors to garner their support for their plan- and bring their thoughts to the judge, who can then determine if the revival effort should not be supported.
Let’s see what happens…
