Yellow Corporation: 99-Year LTL Giant's $2.4B Liquidation

Yellow Corporation, America's third-largest less-than-truckload carrier and one of the oldest trucking companies in the nation, filed for chapter 11 bankruptcy on August 6, 2023, in the United States Bankruptcy Court for the District of Delaware. The 99-year-old company filed days after a labor dispute with the International Brotherhood of Teamsters triggered customer departures that reduced daily shipments from 40,000 to near zero in four days. The filing displaced approximately 30,000 employees, including 22,000 Teamsters union members.

The case drew scrutiny for Yellow's $700 million CARES Act loan from the federal government, which congressional investigators later concluded should never have been approved. Yellow's chapter 11 proceeded as an orderly liquidation, generating approximately $1.88 billion from terminal auctions and over $2.4 billion in total asset sales. The company fully repaid the federal loan plus $151 million in interest in February 2024. After more than two years of litigation over multi-billion dollar pension claims, the court confirmed the Fourth Amended Joint Chapter 11 Plan on November 17, 2025.

Company History and the Road to Bankruptcy

A Century in American Trucking.

Yellow Corporation's origins trace back to 1924 when A.J. Harrell founded Yellow Transit Company in Oklahoma City. The company's yellow trucks became widely recognized on American highways over the following decades. Through organic growth and acquisitions, Yellow evolved into one of the nation's largest LTL freight carriers, operating under multiple regional brands including YRC Freight, Holland, New Penn, and Reddaway.

At its peak, Yellow operated approximately 12,000 trucks and 35,000 trailers, serving customers through an extensive terminal network spanning the continental United States. The company historically held 10-15% of the LTL market, making it a large player in the U.S. LTL market. By Q1 2023, however, Yellow's daily tonnage had declined to 27,430 tons per day—less than half of the 57,000 tons per day it handled a decade earlier.

Decades of Financial Struggles.

Yellow's financial troubles long predated its 2023 bankruptcy. The company had been non-investment grade for over a decade before the pandemic struck. It carried debt and pursued multiple operational transformation efforts.

In 2019, Apollo Global Management extended a $600 million term loan to Yellow, gaining influence over the company's financial decision-making. Apollo positioned itself to provide DIP financing at 17% interest rates with closing fees reaching up to $32 million. Apollo subsequently sold its $485 million debt position to Citadel before the bankruptcy filing.

The "One Yellow" Initiative.

In May 2022, YRC Worldwide rebranded as Yellow Corporation and launched a transformation strategy called "One Yellow." The initiative aimed to consolidate the company's various operating brands—Holland, New Penn, YRC Freight, Reddaway, and Yellow Logistics—into a unified national LTL carrier. Phase 1 of the initiative integrated YRC Freight and Reddaway linehaul networks in the Western region during 2022, creating 360 "utility driver" positions and eliminating nine West Coast terminals.

Phase 2 of One Yellow, which targeted 70% of the company's network, faced immediate union resistance. Beginning in December 2022, the Teamsters blocked implementation, arguing the consolidation would cost union members their jobs. The initiative was estimated to cost Yellow $22.85 million per month in unrealized operational savings.

The $700 Million Federal Loan

Loan Approval and Terms.

In July 2020, amid the COVID-19 pandemic, Yellow received a $700 million loan from the U.S. Treasury Department under the CARES Act. The loan was justified under a national security provision requiring certification from the Department of Defense that the borrower was "critical to maintaining national security." In exchange for the loan, the Treasury Department received a 29.6% equity stake in the company.

The loan represented 95% of total funds disbursed under the CARES Act's national security lending provision.

Congressional Investigation Findings.

Congressional investigations later detailed the loan approval process. According to reports from the Congressional Oversight Commission and House subcommittees, Defense Department officials initially assessed that Yellow was not "critical" to national security. On June 24, 2020, the Defense Department told Treasury it would not certify the loan application.

However, after Treasury Secretary Steven Mnuchin spoke with Defense Secretary Mark Esper, the certification was reversed. Reports indicated that White House chief of staff Mark Meadows had planned to call Treasury about Yellow's loan request. Yellow had spent $570,000 on congressional lobbying in 2020 alone.

Congressional investigators ultimately concluded the loan should not have been extended to a company that had been "non-investment grade for over a decade" before the pandemic.

Labor Dispute and Operational Shutdown

The July 2023 Crisis.

The relationship between Yellow and the International Brotherhood of Teamsters, led by General President Sean O'Brien, deteriorated throughout 2023. Yellow's inability to make a scheduled $50 million pension payment to multiemployer pension funds in the spring of 2023 escalated tensions.

In late July 2023, the Teamsters issued a 72-hour strike notice, triggering immediate customer departures. Daily shipments fell from approximately 40,000 to near zero in just four days. Shippers diverted their business to competitors including XPO, Estes Express, Saia, and ABF Freight.

Yellow CEO Darren Hawkins publicly blamed the Teamsters for "nine months of union intransigence, bullying and deliberately destructive tactics" that he argued destroyed the company. The union disputed this characterization.

Operational Shutdown and Mass Layoffs.

Yellow's operations ceased on July 30, 2023, one week before the bankruptcy filing. The shutdown displaced approximately 30,000 employees. The mass terminations would later trigger WARN Act litigation alleging the company failed to provide adequate notice to workers.

Chapter 11 Liquidation Process

DIP Financing and First Day Motions.

Yellow filed its chapter 11 petitions on August 6, 2023, immediately seeking approval for debtor-in-possession financing to fund an orderly wind-down. The court approved a DIP facility of up to $142.5 million to facilitate the asset sale process.

The Official Committee of Unsecured Creditors was appointed on August 16, 2023, retaining Akin Gump Strauss Hauer & Feld LLP as counsel and Miller Buckfire as investment banker.

Terminal Auction: $1.88 Billion in Real Estate.

A major element of Yellow's bankruptcy was the auction of its terminal network. On September 15, 2023, the court entered a Bidding Procedures Order establishing the framework for marketing and selling the company's real property assets. Estes Express Lines was approved as the stalking horse bidder on September 21, 2023, with an initial bid of $1.525 billion.

Yellow's advisors marketed the properties to more than 650 potential buyers through online platforms and direct outreach. The auction commenced November 28, 2023.

The terminal auction generated approximately $1.88 billion from 128 owned properties sold to 21 different bidders. An additional 23 leased properties yielded approximately $83 million. For XPO alone, the acquisition represented 5-10 years of traditional facility growth compressed into a single transaction.

Rolling Stock and Other Assets.

Beyond real estate, Yellow's estate included thousands of trucks, trailers, and other rolling stock. The company initially scheduled a rolling stock auction but cancelled it in October 2023 in favor of negotiated sales. Fleet assets were disposed of through multiple transactions, generating approximately $176 million in proceeds.

Combined with terminal sales, Yellow's asset disposition program produced approximately $2.4 billion in total proceeds and enabled full repayment of secured creditors including the federal government.

Federal Loan Repayment

In February 2024, Yellow fully repaid the $700 million CARES Act loan plus $151 million in interest to the U.S. Treasury Department. The repayment came after the court approved asset sales totaling approximately $1.9 billion.

The Teamsters, however, criticized the repayment prioritization. Union officials condemned "failed executives" for ensuring government repayment while workers faced job losses and uncertain severance recoveries.

Pension Fund Litigation

Multi-Billion Dollar MEPP Claims.

Yellow's withdrawal from multiemployer pension plans triggered large withdrawal liability claims under ERISA. At the peak, pension funds filed claims totaling approximately $7.8 billion, with the Central States Pension Fund alone claiming nearly $5 billion in withdrawal liabilities plus an additional $900 million in "participation guarantees."

The pension litigation raised novel legal questions about the interpretation of ERISA's withdrawal liability provisions, particularly whether the American Rescue Plan's $35.8 billion payout to Central States affected Yellow's obligations. Yellow argued the Special Financial Assistance received by Central States should reduce or eliminate its claims; the pension funds disagreed.

Third Circuit Appeal and Settlement.

In September 2024, Judge Goldblatt issued a ruling rejecting Yellow's challenges to pension fund claims, causing the company's stock to fall 90%. The ruling affirmed the PBGC's regulatory authority and rejected Yellow's argument that Central States had been "made whole" by the American Rescue Plan. The case was certified for direct appeal to the Third Circuit on multiple ERISA interpretation issues.

The Third Circuit proceedings addressed questions about the interaction between ERISA's withdrawal liability provisions and the Special Financial Assistance program created by the American Rescue Plan Act of 2021. The appeals court ultimately affirmed the Bankruptcy Court's rulings on key pension-related issues.

Ultimately, Yellow and the major pension funds reached a settlement in November 2025. The settlement with Central States and other pension funds reduced the aggregate allowed MEPP claims from approximately $7.4 billion to roughly $3.3 billion, with an expected recovery of 12-16% for pension claims.

WARN Act Litigation

Yellow's rapid shutdown triggered class action litigation under the Worker Adjustment and Retraining Notification (WARN) Act, which requires employers to provide 60 days' advance notice before mass layoffs. Multiple classes of former employees alleged Yellow's notices were procedurally deficient. Judge Goldblatt found that Yellow failed to provide sufficiently detailed WARN notices to affected workers. Potential damages for all former workers could have reached $244 million.

A ruling came in February 2025 when the court determined that Yellow was a "liquidating fiduciary" when it terminated 22,000 Teamsters union members on July 30, 2023. This designation limited WARN Act liability for unionized employees. In June 2025, Yellow settled WARN claims with nonunion employees for $12.3 million, encompassing two separate plaintiff classes. The settlement was approved on a final basis, resolving a portion of the employment-related litigation.

Plan Confirmation

Extended Path to Confirmation.

Yellow's chapter 11 case required multiple plan iterations over more than two years before achieving confirmation. The plan was amended multiple times during the case.

The Fourth Amended Joint Chapter 11 Plan was confirmed on November 17, 2025, enabling distributions of up to $700 million to creditors through a Liquidating Trust structure.

Creditor Recoveries.

The plan faced opposition from MFN Partners, LP, which holds a 42.5% equity stake in Yellow. MFN, which had acquired its stake in the days leading up to the July 30, 2023 shutdown, argued that Chapter 7 liquidation would yield higher recoveries than the proposed chapter 11 plan. MFN filed a motion to convert the case to Chapter 7, which the bankruptcy court denied on June 17, 2025. Following plan confirmation, MFN filed an appeal on November 18, 2025, continuing to challenge the restructuring's outcome.

Ongoing Litigation Against the Teamsters

Yellow's bankruptcy estate has continued pursuing litigation against the Teamsters union. The company filed suit alleging the union "knowingly schemed to destroy Yellow" through interference with restructuring efforts. An appeals court reinstated Yellow's $137 million lawsuit against the Teamsters after the initial complaint was dismissed. If Yellow's allegations succeed, total damages could exceed $1 billion. The litigation continues as an asset of the Liquidating Trust, with any recoveries to be distributed to creditors under the confirmed plan.

Industry Impact

Market Share and Pricing Impact.

Yellow's exit removed approximately 10-15% of LTL market capacity. The carriers that acquired Yellow's terminals—XPO, Estes, Saia, Knight-Swift, and ABF—expanded their networks. Competitors including FedEx Freight, ABF Freight, and TForce Logistics absorbed displaced freight volumes in the months following Yellow's shutdown.

Yellow had historically offered the cheapest price points in the LTL industry. Its exit removed a price competitor from the market, with surviving carriers indicating they would not honor Yellow's pricing structures.

Operating Brands Lost.

Yellow Corporation operated through five distinct brands at the time of its shutdown:

Professional Retention and Fees

Key Professionals.

Professional fee applications extended through December 2025, with monthly applications from Alvarez & Marsal, Kirkland & Ellis, Ducera Partners, Ernst & Young, Akin Gump, Benesch, and others reaching their twenty-seventh monthly cycles.

Additional Claims and Disputes

Beyond pension and labor claims, Yellow's estate faced environmental liabilities related to its decades of trucking operations. The U.S. Department of Justice and Environmental Protection Agency asserted claims related to the Newtown Creek Superfund Site and other environmental matters. These claims were subject to ongoing negotiation and objection throughout the bankruptcy proceedings. Terminal properties acquired by buyers were sold free and clear of environmental claims, with any residual liability remaining with the bankruptcy estate.

Yellow's extensive real property portfolio also required systematic treatment of unexpired leases. The company assumed approximately 78 unexpired real property leases in February 2024, with cure amount disputes requiring resolution with numerous landlords. Properties not assumed or sold were rejected, generating rejection damage claims that flowed into the general unsecured creditor pool. Major landlords and counterparties that participated in lease assumption objections included Southeastern Freight Lines, M4 Terminals, Link Logistics Real Estate Management, Union Pacific Railroad Company, and numerous individual property owners. The lease assumption and rejection process extended throughout the case, with the court resolving cure disputes as they arose.

Avoidance Actions and Claims Administration

The bankruptcy estate pursued avoidance actions against vendors and other parties who received payments in the 90 days preceding the bankruptcy filing. Settlement procedures were approved for resolution of preference claims, with settlements achieving approximately 65% recovery rates on many actions. The estate filed multiple rounds of settlement notices (through the Sixth Notice of Settlement by December 2025), with ongoing recoveries benefiting the Liquidating Trust. Special counsel was retained to pursue avoidance actions on behalf of the estates, with recovered amounts contributing to distributions for general unsecured creditors.

Over 8,600 docket entries were filed during the more than two-year proceeding. The estate filed thirty-four omnibus objections to claims through December 2025, systematically reducing the claims pool by challenging duplicative, overstated, or otherwise objectionable proofs of claim. The Epiq Corporate Restructuring claims portal processed claims from thousands of vendors, landlords, former employees, and other creditors. The claims reconciliation process continued through post-confirmation administration, with the Liquidating Trustee responsible for resolving remaining disputed claims.

Claim transfers to entities including CRG Financial LLC and Fair Harbor Capital, LLC were recorded.

Case Timeline

Frequently Asked Questions

Why did Yellow Corporation file for bankruptcy?

Yellow filed for chapter 11 after a labor dispute with the Teamsters triggered customer departures that reduced daily shipments from 40,000 to near zero in four days. The company had been non-investment grade for over a decade before the pandemic, and the blocked "One Yellow" consolidation initiative was estimated to cost $22.85 million per month in unrealized savings.

What happened to Yellow's $700 million federal loan?

Yellow fully repaid the $700 million CARES Act loan plus $151 million in interest to the U.S. Treasury in February 2024. The repayment came from asset sale proceeds after the company's terminal auctions generated approximately $1.88 billion.

Who bought Yellow's trucking terminals?

XPO acquired 28 properties for $870 million, representing 5-10 years of traditional facility growth. Estes Express purchased 24 terminals for $248.7 million, Saia acquired 17 properties for $235.7 million, and Knight-Swift bought 13 terminals for $51 million. In total, 21 different buyers acquired 151 properties for approximately $1.96 billion.

How much will Yellow's creditors recover?

Secured creditors, including the U.S. Treasury, were paid in full. Priority claims and employee PTO claims (totaling $185-280 million) will be paid in full. General unsecured creditors are projected to recover 12-16% of their allowed claims through distributions from the Liquidating Trust.

What happened to Yellow's 30,000 employees?

Yellow terminated approximately 30,000 employees—including 22,000 Teamsters union members—when operations ceased on July 30, 2023. The company settled WARN Act claims with nonunion employees for $12.3 million. The court found Yellow was a "liquidating fiduciary" at the time of termination.

How were the pension claims resolved?

Yellow's withdrawal from multiemployer pension plans triggered claims exceeding $7.4 billion. After extensive litigation and a Third Circuit appeal, Yellow reached settlements in November 2025 that reduced aggregate allowed pension claims to approximately $3.3 billion, with projected recoveries of 12-16%.

Is the Teamsters lawsuit still pending?

Yes. An appeals court reinstated Yellow's $137 million lawsuit against the Teamsters alleging union interference destroyed the company. If Yellow prevails, damages could exceed $1 billion. The litigation continues as an asset of the Liquidating Trust.

Why did MFN Partners oppose the plan?

MFN Partners, holding a 42.5% equity stake, argued that Chapter 7 liquidation would yield higher creditor recoveries than the chapter 11 plan. The bankruptcy court denied MFN's conversion motion in June 2025. MFN filed an appeal following plan confirmation in November 2025.

How did Yellow's bankruptcy affect the trucking industry?

Yellow's exit removed 10-15% of LTL market capacity. Competitors absorbed displaced freight volumes, and Yellow had historically offered the cheapest price points, with surviving carriers indicating they would not honor Yellow's pricing structures.

When was Yellow's plan confirmed?

The Fourth Amended Joint Chapter 11 Plan was confirmed on November 17, 2025, after more than two years of litigation. The plan establishes a Liquidating Trust to distribute remaining proceeds to creditors and pursue ongoing litigation including the Teamsters lawsuit.

For comprehensive coverage of trucking and logistics bankruptcies, visit the ElevenFlo bankruptcy blog.