Bankrupt trucker Yellow may start new REIT using empty terminals
NEW YORK: Defunct cargo hauler Yellow Corp may put its remaining cargo terminals and other vacant properties into a real estate investment trust that could be used to raise money for creditors, bankruptcy advisers for the company tell a judge.

The proposal was made public during a bankruptcy court fight in Wilmington, Delaware, between company officials and a committee of lower-ranking creditors.

Previously, the company had said it would likely liquidate the 125 properties it was unable to sell last year during a court-supervised auction.

“We have valuable property,” chief restructuring officer Matthew Doheny testified during a bankruptcy hearing.

In the coming weeks Doheny and other advisers will test investor appetite for a new company built on the carcass of Yellow.

The cargo hauler shut down and filed bankruptcy last year following a battle with the Teamsters union, which represented 10s of thousands of company drivers.

The goal is to find out if the company can raise more cash for creditors by keeping the properties than by liquidating them, Doheny said.

Should the company raise enough money and successfully challenge some of the US$10bil in claims it currently faces, shareholders could wind up collecting something in the case, he said. Normally shareholders are wiped out in big corporate bankruptcy cases.

One option would be to create a real estate investment trust to hold at least some of Yellow’s properties, according to court testimony.

The company owns 47 locations and has long-term leases on another 78, testimony and court documents showed.

After filing for bankruptcy in August, Yellow set off a frenzy among other truckers looking to buy up valuable terminals that Yellow acquired over the decades it operated. — Bloomberg
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Defunct cargo hauler Yellow Corp may put its remaining cargo terminals and other vacant properties into a real estate investment trust that could be used to raise money for creditors, bankruptcy advisers for the company tell a judge.