Freight News:
Jack Cooper Transport named as Yellow suitor
Auto hauler Jack Cooper Transport was named by Reuters as a bidder for Yellow Corp. in a deal that would pull the former less-than-truckload carrier from bankruptcy. While described as a “long shot,” the potential transaction is said to be garnering “increasing interest from the Biden administration.”
The Monday report follows recent letters from senators to Treasury Secretary Janet Yellen asking to extend the maturity date on a 2020 COVID-relief loan. The senators said an extension of the maturity date is required to facilitate Jack Cooper’s bid.
“By extending the maturity date of this loan, the interested parties would have the financing for their bid, and retain thousands of high-quality, jobs,” an Oct. 19 letter from Sen. Roger Marshall, R-Kan., stated.
Yellow’s $700 million term loan from the Treasury matured on Sept. 30.
Details on what assets Jack Cooper would be buying have not been provided. Sen. Marshall’s letter referenced “interested parties attempting to make a ‘going concern’ bid for the company.”
However, Yellow ceased operations in late July and has terminated most of its employees, including 22,000 Teamsters. The company has no revenue-generating operations currently and its assets are set to be auctioned off in the coming weeks.
Further, it remains to be seen how a company of Jack Cooper’s size — 1,200 trucks according to Federal Motor Carrier Safety Administration data — could pull off such a transaction. Yellow’s estate is expected to reel in more than $2.5 billion, which would more than satisfy secured creditors that include the Treasury.
Yellow’s roughly 12,000 tractors and 35,000 trailers were approved Friday by a Delaware bankruptcy court for sale through auction houses. A preliminary $1.525 billion bid has been approved by the court as a starting point for the sale of the company’s more than 170 owned terminals.
The Treasury and a committee of unsecured creditors to the estate were said to have participated in negotiations of the agency agreement with liquidators, a bankruptcy court filing showed.
Jack Cooper is headquartered in Kansas City, Missouri, not far from Overland Park, Kansas, where Yellow was based before relocating executive offices to Nashville, Tennessee, last year. Its employees are also represented by the Teamsters.
Jack Cooper too filed for Chapter 11 bankruptcy. Shortly after filing for bankruptcy protection in 2019 it sold assets to longtime financial partner Solus Alternative Asset Management to reduce more than $300 million of debt. There has been no mention of Solus’ involvement in an offer for Yellow.
“We ask that Treasury indicate to the bankruptcy court that it is in the process of seeking the authority to extend the CARES Act loans which would enable rejoining the currently bifurcated asset at auction,” stated an Oct. 6 letter from Sens. Sherrod Brown, D-Ohio; Bernie Sanders, I-Vt.; and Tammy Baldwin, D-Wis., among others.
Inquiries to Jack Cooper, Solus and Marshall’s office were not responded to by the time of publication.
More FreightWaves articles by Todd Maiden
- ArcBest prudent in approach to new freight opportunities
- Auction houses to liquidate Yellow’s tractors, trailers
- Heartland books Q3 loss, cuts unprofitable customers and lanes
The post Jack Cooper Transport named as Yellow suitor appeared first on FreightWaves.
Source: freightwaves - Jack Cooper Transport named as Yellow suitor
Editor: Todd Maiden