Cash-strapped U.S. trucking company Yellow Corp has ceased operations and is filing for bankruptcy after failing to reorganize and refinance over a billion dollars in debt, the Teamsters Union said on Sunday.
Yellow, formerly called YRC Worldwide (NASDAQ:YELL), did not immediately respond to a Reuters request for comment.
Earlier this month Yellow averted a threatened strike by 22,000 Teamsters-represented workers and last week it said it was exploring opportunities to divest its third-party logistics company.
“Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government,” Teamsters General President Sean M O’Brien said in a statement.
The company was the third-biggest U.S. trucker specializing in the less-than-truckload segment that combines shipments from different customers in the same trailer.
Its customers included large retailers like Walmart (NYSE:WMT) and Home Depot (NYSE:HD), manufacturers and Uber (NYSE:UBER) Freight, some of which paused cargo shipments to the company for fear those goods could be lost or stranded if the carrier went bankrupt.
The company said in June that the Teamsters Union was blocking restructuring and modernization efforts, collectively known as “One Yellow”, which it said were critical for Yellow’s survival and ability to refinance about $1.3 billion of debt due to be repaid by 2024.
Part of that debt is a $700 million pandemic relief loan provided in 2020 by the Donald Trump-led U.S. government in exchange for a 30% stake in the Nashville, Tennessee-based company.
Earlier in the day, the Wall Street Journal reported the closure of the trucking firm’s operations citing notices sent to customers and employees. On Friday, the WSJ also reported that the company has laid off a large number of nonunion workers.