Representative French Hill, Republican of Arkansas and a member of the Congressional Oversight Commission, said in an interview that he was not sure how much taxpayers might get back. “As I said back in the summer of 2020, in my judgment, the loan was inadequately secured to the taxpayers,” he said.
Yellow, which employed about 30,000 people and is based in Nashville, operates in the less-than-truckload sector, in which truckers fill containers with goods from more than one shipper and move them in and out of terminals.
The company’s management has blamed the International Brotherhood of Teamsters, which represented 22,000 workers at Yellow, for its problems, contending that the union prevented the company from making needed changes to how it operates. But some analysts say Yellow’s executives probably deserve much of the blame for the company’s demise by, among other things, failing to properly integrate the businesses they acquired over the past two decades.
A Treasury official declined to comment on whether the department expected to be repaid in full. Yellow has paid about $67 million in interest on its $700 million loan and just $230 of the principal owed. Yellow owes more than $700 million because, under the terms of the loan, some of the interest is not paid annually but gets added to the principal.
The Treasury does not enter the bankruptcy fray in the strongest position.
Yellow used the first portion of its federal loan, about $300 million, to pay for operational expenses, including labor costs and to lease equipment. Bankruptcy experts said it would be very hard for the Treasury to find collateral that could be sold to repay this part of the loan.
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