It truly is the end of the line for Yellow. After declaring bankruptcy in July of 2023, a federal bankruptcy court in Delaware cleared the path for the final liquidation of defunct Yellow Corp.’s estate on Monday. The plan outlines the distribution of as much as $700 million to remaining creditors, including former employees. The Monday order, however, could be challenged on appeal by Yellow’s largest equity holder, MFN Partners.
MFN and its affiliate, Mobile Street, objected to the proposed bankruptcy plan, arguing that the governing committee, which was composed of creditors with inherent conflicts of interest, would inevitably prioritize their own financial outcomes. MFN also put forward a scenario asserting recoveries to unsecured creditors would be higher in a Chapter 7 liquidation.
Ultimately, Judge Craig Goldblatt overruled MFN’s objections on Monday and entered an order to confirm the final Chapter 11 plan. He said that he doesn’t believe the plan was “proposed in bad faith” and that by his calculations, creditors wouldn’t see greater recoveries in a Chapter 7. Read the full story by FreightWaves’ Todd Maiden here.
