BNSF was among those listed as “Unsecured Creditors” as Yellow Freight filed chapter 11 bankruptcy late Sunday afternoon. It looks like liquidation of Yellow’s assets is next.
I wonder how much is owed to the BNSF and if they’ll eventually get any of it.
This will be paywalled:
Likely pennies on the dollar. I had a customer go bankrupt…owed me about $10K…after all said and done I got $430.00.
The ones that will get the bulk of any funds will be the bankruptcy lawyers. Creditors be damned.
Yellow’s stock has taken a “dead cat bounce”…up 300% last week. Why?
Possible covering of short sales or possibly the asset sales will cover liabilities. They own 160 terminal properties and also a considerable number of late model tractors (typically day cabs) and trailers which was funded by the $700m loan from Feds in 2020 which was partially converted to equity.
My employer is owed considerable (for us) by Yellow.
Very interesting article in Saturday’s WSJ - an interview with Sean O’Brian the Teamsters head. His attitude was some will suffer but Yellow had to go. Some numbered 22,000. He was very happy about the UPS settlement. It has been theorized that Teamsters invested in negotiating with UPS much more than Yellow, possibly true as they saw that yellow was a dying horse.
Ed
Yes, the lawyers always win.
An interesting look at bankruptcy (Reading Railroad) is “Derailed” by Howard Lewis. It has been a few years since I read it, but Lewis was named as Trustee of the Reading and was in charge of settling the accounts. It took years and drained him of his career. He died in 2016 and if I recall was bitter of how his law firm treated him.
He did settle for 3x what the Feds offered.
Interesting read if one can find it.
Not necessarily a “railfan” book, more historical content of the Reading bankruptcy.
BTW…BNSF and others (including my employer) knew what they were dealing with (Yellow). The writing was on the wall, in yellow ink, for years.
Ed
If you all may recall. Yellow Corp and BNSF forged a deal for COFC traffic back in 2019. BNSF financed the purchase of 600 53’ containers for Yellow Corp. I imagine Yellow fell behind on payments to be made back to BNSF.
I was checking the University of Indiana Press site because of some new releases. They have the book mentioned, “Derailed by the Reading” listed as available.
Jeff
More than just theory - Yellow was a dead man trucking. Their operating ratio was floating close to 100% - and they had long since disposed of any assets that were not essential to day-to-day operations unless they could implement the “one Yellow” model. When you don’t generate any profit in your operations, there’s nothing left to service the MASSIVE debt they took on to pay for the USF (Holland, Reddaway, and New Penn) acquision.
They were a high-cost operation trying to complete as a low-cost carrier - and utterly doomed to a very short future no matter what the Teamsters gave back. Instead, the Teamster wisely used Yellow (about 22K Teamsters)to win their negotiations with UPS (340K Teamsters - the largest single union contract in the US).
It doesn’t look very wise when you’re one of the 22k thrown in the trash after paying the same union dues as the other guys.
If you concede to a carrier that you view as one that will STILL FAIL despite your concessions. You don’t make the concessions. Yellow never gave indications that it could be a profitable ongoing concern, no matter how much help it was given.
Tell me about it! [8o|]
I was an operations manager for two LTL trucking companies in the 1980’s and 1990’s (St. Johnsbury and NW Transport (renamed as Nationsway Transport. I stayed with “Saint J” to the bitter end (and during the closeout operation as well), and bailed on NWTP for a completely new career about six months before they shut down.
[quote user=“Ulrich”]
BaltACD
The ones that will get the bulk of any funds will be the bankruptcy lawyers. Creditors be damned.
Yes, the lawyers always win.
/quote]
You also have to wonder; How bjg a pay cut did the “UNION Big Shots” have to take as they jettisoned some 22,000 Dues paying members???
Do you make concessions that really won’t save 22K jobs because of the very ineptness of the company seeking the concessions or do you negotiate improved contract conditions with 370K jobs.
I read that the amount owed to BNSF is 6.3 million dollars. That isn’t going to break BNSF by a long shot.
But you can bet that sommeone in Ft. Worth has been assigned to get the money owned to BNSF.
This month’s TRAINS MAGAZINE has a story which puts the container business in perspective. BNSF has the JB Hunt business, which my old boss Michael Haverty secured while being President of the Santa Fe, and BNSF is handling the container business very well.
LOWELL, Ark. and FORT WORTH, Texas – Today, J.B. Hunt Transport Services Inc. (NASDAQ: JBHT), one of the largest supply chain solutions providers in North America, and Burlington Northern Santa Fe, LLC announced J.B. Hunt’s subsidiary, J.B. Hunt Transport, Inc., has entered into a definitive agreement to purchase the brokerage operations of BNSF Logistics, LLC.
It’s getting to the point where those who work in the OTR industry are just wondering when BNSF will just pull the trigger on buying JB Hunt totally to create a seamless logistical system that can go coast to coast. This has happened in the past with NS buying North American van lines but nothing on this scale. They have 24k power units 27k drivers and last year ran over 1.6 billion miles on the road let alone what their containers did on the BNSF.
Doesn’t the Hunt family enjoy being in the trucking business?