NEW YORK, Aug 9 (Reuters) – Bankrupt trucking company Yellow Corp (YELL.O) will not seek court approval to borrow $142.5 million from private equity firm Apollo Global Management as planned on Wednesday, instead seeking time to explore alternate loan offers, an attorney for the company said.
Yellow has received similar-sized loan offers from MFN Partners, an investment firm that owns 41% of Yellow’s stock, and Estes Express Lines, a rival in freight trucking, Yellow’s attorney Pat Nash told U.S. Bankruptcy Judge Craig Goldblatt at a court hearing in Wilmington, Delaware.
Yellow is weighing those offers while negotiating with Apollo on how those loans would impact Apollo’s collateral rights on a pre-existing $501 million loan.
Apollo’s proposal has features that Yellow “doesn’t love,” including high fees, a 90-day timeline for selling the company’s assets, and veto rights over “piecemeal” asset sales, Nash said.
Yellow plans to return to court on Friday with more clarity on which loan it will choose. Goldblatt said the competition was encouraging, and that he hoped it would lead to better financing.
Yellow filed for bankruptcy on Sunday with just $39 million cash on hand, which the company said was not enough to run a months-long bankruptcy sale for its 12,000 trucks, real estate holdings and other assets.
Yellow blamed its collapse on a labor dispute with the International Brotherhood of Teamsters union. The union, which represents about 22,000 Yellow employees, said the Nashville, Tennessee-based company “mismanaged” its way to bankruptcy despite concessions made by workers.
Reporting by Dietrich Knauth
Editing by Chris Reese and Richard Chang
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