Knight-Swift Adds 10 More Leased Yellow Terminals to Haul
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Knight-Swift Transportation Holdings Inc. extended its winning streak in auctions of former Yellow Corp. terminals, strengthening its less-than-truckload operations, according to court documents.
Truckload-centric Knight-Swift was the winning bidder on 10 leased properties, paying a combined $2.2 million to take over the leaseholds from the Nashville, Tenn.-based bankrupt LTL carrier, documents filed Feb. 12 show.
Phoenix-based Knight-Swift won terminals in Jefferson, Ga; Meridian, Pocatello and Twin Falls, Idaho; Colorado Springs and Grand Junction, Colo.; Miner, Mo.; Bridgeport, Neb.; and Salina and Topeka, Kan.
A confirmation hearing is scheduled for Feb. 26.
Knight-Swift ranks No. 7 on the Transport Topics Top 100 list of the largest for-hire carriers in North America. It acquired U.S. Xpress in March.
Yellow trucks at a terminal in Hayward, Calif. (David Paul Morris/Bloomberg News)
The company — which said LTL market conditions were strong and truckload markets soft in the fourth quarter of 2023 when releasing its latest earnings — also picked up 13 owned properties for $51.3 million in the first round of auction bids, the fourth-largest haul.
XPO Inc. agreed to pay $870 million for 26 owned terminals and two leased properties, emerging as the top bidder in the auction. Greenwich, Conn.-based XPO ranks No. 5 on the for-hire TT 100 and No. 4 on TT’s list of the largest LTL carriers in North America.
Knight-Swift also acquired two leased terminals in Great Falls, Mont., and East Wenatchee, Wash., for $417,150 in the second round of auction bidding.
Yellow still has 46 owned and 108 leasehold terminals on the auction block, along with around 12,700 tractors and 42,000 trailers the company owned at the time it filed for court protection in August. The company ranks No. 13 on the for-hire Top 100 and No. 3 on the LTL sector list.
Smith
Yellow lawyer Allyson Smith said Feb. 14 during a court hearing that there was interest in 30-40 more of the owned terminals and around 75 leased terminals, which she told the judge presiding over the bankruptcy proceedings was “definitely not an insignificant amount.”
Yellow has closed on 17 transactions involving the sale of 118 owned properties and 25 leasehold properties, Kirkland & Ellis’ Smith said Feb. 14, with a value of $1.9 billion.
A further six transactions are set to close in the coming weeks, comprising 10 owned terminals and one leasehold terminal, Smith added, with a value of $71.6 million.
The U.S. Bankruptcy Court for the District of Delaware on Jan. 12 approved the sale of 23 terminal leases owned by Yellow to six bidders for an aggregate $82.89 million. That followed the court’s December approval of the sale of 128 freight terminals owned by the shuttered carrier for a combined $1.88 billion.
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As a result of the haul from the auction, Yellow on Feb. 5 repaid a controversial $700 million loan from the Department of the Treasury plus interest. Yellow used monies raised from the sales approved Dec. 12 and Jan. 12.
Yellow confirmed Feb. 8 to TT that the company had repaid all its secured creditors. That includes the company’s $142.5 million in debtor-in-possession loans from MFN Partners and Citadel Credit Master Fund on Feb. 8.
Following the repayments, Yellow currently has $300 million in cash on hand, Smith told Judge Craig Goldblatt on Feb. 14.
The next stop in the court is settling unsecured claims, including pension withdrawal liability claims, Worker Adjustment and Retraining Notification Act claims and personal injury claims.
Yellow’s administrators dispute the size of the withdrawal liability claims from Central States Pension Fund and other multi-employer pension funds.
The administrators on Feb. 10 laid out a timeline for their dispute with the pension funds in court filings. It culminates, if the dispute reaches the bench, in a trial Aug. 5-9 and Aug. 12-16.
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Pension Benefit Guaranty Corp. objected to the schedule Feb. 12, arguing it moved too fast given how much documentation had been requested. PBGC is a U.S. government-owned corporation that insures pension funds. Separately, PBGC argued Yellow is breaking PBGC regulations.
Smith’s Kirkland & Ellis colleague Michael Slade said Feb. 14 that PBGC and Yellow resolved the former’s issues with the schedule Feb. 13 and the objection is set to be withdrawn. The schedule has the support of the multi-employer pension funds.
Before any of that gets started, however, a decision on whether the venue for the dispute is the bankruptcy court or arbitration will be made March 6.
