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Yellow’s feeling awfully light on green after a pension ruling didn’t fall its way last week, the Wall Street Journal reported.
The nearly 100-year-old, now-defunct trucking company pulled the Jake Brake on its operations last summer, laying off about 30,000 employees, according to CNN.
That was far from the end of the road for Yellow and its financial troubles. Eleven pension plans took the company to bankruptcy court, alleging that it owed $6.5 billion in withdrawal liability, according to court records.
Yellow argued it was off the hook from its liability because the pension plans received a collective $41.1 billion from the American Rescue Plan Act of 2021. And what did the judge think of Yellow’s interpretation?
“The Court rejects that argument,” US Bankruptcy Judge Craig Goldblatt wrote in a ruling last week, on Friday the 13th.
At issue were a pair of Pension Benefit Guaranty Corporation regulations that were “designed to ensure that a plan’s receipt of special financial assistance would not operate to let a withdrawing employer off the hook for withdrawal liability it would have otherwise owed,” Goldblatt wrote. Yellow argued those regulations “exceed the PBGC’s statutory authority and are contrary to law,” but Goldblatt didn’t buy it.
Yellow is slated to make more than $2.5 billion from the sale of its truck terminal network, which would have been enough to pay off both its secured and unsecured creditors, but now, “the judge’s ruling will severely dilute funds available for those payouts,” according to the Wall Street Journal.