Meanwhile, according to FreightWaves, employees were told to expect the filing Monday. Yellow laid off an unknown number of employees Friday, the outlet later reported, citing a memo that stated the company was “shutting down its regular operations.”
“The likelihood of them surviving and remaining solvent diminishes really by the day,” added Bruce Chan, a research director at investment banking firm Stifel. In 2020, under the Trump administration, the Treasury Department granted the company a $700 million pandemic-era loan on national security grounds. Last month, a congressional probe concluded that the Treasury and Defense Departments “made missteps” in this decision — and noted that Yellow's “precarious financial position at the time of the loan, and continued struggles, expose taxpayers to a significant risk of loss.
In May, Yellow reported a loss of $54.6 million, a decline of $1.06 per share, for its first quarter of 2023. Operating revenue was about $1.16 billion in the period. A series of heated exchanges have built up between the Teamsters and Yellow, who sued the union in June after alleging it was “unjustifiably blocking” restructuring plans needed for the company's survival. The Teamsters called the litigation “baseless” — with general president Sean O’Brien pointing to Yellow's “decades of gross mismanagement," which included exhausting the $700 million federal loan.