Bankrupt Yellow trucking executives given $4.6 million

The Yellow Corporation in July paid $4.6 million in bonuses to eight current and two former executives before closing down and permanently dismissing about 30,000 workers, according to court filings in Delaware bankruptcy court, Fortune magazine reports.

The payouts included $625,000 to Yellow Chief Executive Officer Darren Hawkins, $1 million to Chief Restructuring Officer Matthew Doheny, and $1.08 million to Chief Operating Officer Darrel Harris, according to a company court filing cited by Fortune.

This year, Yellow failed to make a $50 million payment for contractual obligations for workers’ health-care and pension benefits, and the Teamsters threatened to strike over the issue. The union said Yellow has had “decades of gross mismanagement,” and the executives getting bonuses arguably are the people who led the Less-Than-Load (LTL) trucking company to insolvency.

Teamsters President Sean O’Brien blasted Yellow for paying bonuses while the company skipped mandated payments for worker benefits.

“Disturbing details of corruption, greed and graft continue to emerge at Yellow,” O’Brien said. “Workers in this country need real protections against corporations who game the system.”

The Teamsters have called on Congress to investigate the situation and consider bankruptcy reforms such as limiting the enrichment of executives responsible for companies’ financial condition.

The Nashville-based Yellow, having operated for almost a century, filed bankruptcy on Aug. 6, reporting $39 million cash on hand, 11,700 trucks, 35,000 trailers and assorted real estate holdings, but $1.2 billion in long-term debt, including a $700 million government bailout loaned to the corporation as part of the COVID rescue package.

Yellow going broke could be the largest trucking bankruptcy in U.S. history.

The deadline for bids for tractor-trailer assets is Oct. 13, with Oct. 18 set for a sale auction is necessary. Bids for the disposition of the shipping sites are due Nov. 9, with a possible Nov. 28 auction if needed.

In a Sept. 13 filing, the non-union Estes Express trucking firm bid $1.525 billion for Yellow’s shipping centers, setting a floor for possible bidding for the terminals.

U.S. Sen. Amy Klobuchar in a Senate Judiciary Committee meeting accused Yellow of trying to speed up liquidation of assets to avoid taking responsibility for mismanagement at the expense of workers.

“After a company files for Chapter 11, employees risk losing their livelihoods, health benefits and pensions through no fault of their own,” Klobuchar said. “These are things that workers have worked hard for and have earned.”

In the last 14 years, Teamsters General Secretary-Treasurer Fred Zuckerman says, the union made about $5 billion in concessions to help the corporation “stay in business.”

Last year, Yellow posted a net income of $21.8 million.