Yellow Corp trucks are parked at a facility in Hayward, Calif., Aug. 2. (David Paul Morris/Bloomberg News)
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negotiations between Yellow Corp. An increasing number of parties interested in financing the Nashville, Tennessee company’s bankruptcy proceedings are scheduled to run through August 15.
Yellow’s lead bankruptcy attorney, partner of Kirkland & Ellis Patrick Nashtold a Delaware court on August 11 that negotiations continued with a less-than-a-truckload competitor Estes Express Lineshedge fund MFN Partners and a number of other parties have stepped forward since the Aug. 9 session, ready to lend the 99-year-old company money while it stalls.
Nash said Estes, based in Richmond, Virginia, has submitted terms of its offer to lend Yellow $230 million since the last hearing. Estes Express Lines ranks #14 on the Transportation Topics Top 100 list of the largest charter carriers in North America. A spokeswoman for Estes Express Lines declined to comment on any involvement in the proceedings on August 11.
Estes Express Lines ranks #5 among the largest LTL carriers. Prior to closing its doors on July 30, Yellow was ranked by Estes as the third largest less than truckload carrier. Yellow was also ranked No. 13 in the TT 100 for rent.
Nash expects at least one entity — MFN is also Yellow’s largest shareholder — to pursue a firm offer to provide a loan.
“I’m optimistic that we’ll have one of those parties post; maybe we’ll have both parties post, which will make that more interesting. But we think we’ll have at least one of those parties post, willing to put money in on a start-up basis, with terms and conditions that work with The secured parties to whom the petition has been previously submitted as well as to the debtors,” said Nash Rules Craig Goldblatt.
If this proves to be true, it “would undoubtedly be more appropriate” than offering financing from the funds he leads Apollo Global ManagementEspecially since both Estes and MFN offer a loan that is on the repayment waiting list behind Apollo and other lenders, Nash said.
Apollo offered a deal that would extend Yellow a short-term loan to refinance more than $500 million in debt. Apollo’s bid was on the table before Yellow filed for Chapter 11 bankruptcy on August 6. Yellow could replace Apollo’s bid if he deems a replacement would be more appropriate.
Milbank partner Dennis Dunnwho represents Apollo, the largest secured lender, said the investment group was willing to work with parties that wanted to lend yellow money while remaining short of Apollo in repayment order.
MFN said, while it is now offering “junior” loan terms that would put the shareholder in a similar place on a repayment waiting list to Estes, it is also keen to win the best terms, said MFN. Eric Winstonpartner with Quinn Emmanuel Urquhart & Sullivan representing the fund.
“We want to make sure the lender (debtor of possession) whoever it is…allows the property to do aggressive marketing (and) doesn’t give a leg up to anyone interested in bidding… (whatever that is) has to be the most efficient from an economic point of view, But it is effective to allow for this aggressive marketing process,” he said.
After a hearing at 1 p.m. EST on August 15 was agreed upon as the next stage in the process, Goldblatt agreed on plans to keep Yellow’s locked-in assets in the best possible condition for potential buyers.
A bankruptcy judge has agreed to disburse $1.5 million to cover two weeks of utility payments for the 311 Transportation Centers in Yellow. Of those 311, Yellow has 169.
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