NEW YORK, Sept 15 (Reuters) - Yellow Corp (YELLQ.PK) received U.S. bankruptcy court approval on Friday to sell its vehicle fleet by October, while continuing to market its real estate assets, which have already received a $1.525 billion bid.
The freight shipping company, which went bankrupt in August after a protracted labor dispute, owns approximately 12,000 trucks and 35,000 trailers, according to its bankruptcy court filings. Yellow has set an Oct. 13 bid deadline for those assets.
Hundreds of buyers have already expressed interest and signed non-disclosure agreements, and some have begun conducting on-site inspections, Yellow attorney Allyson Smith told U.S. Bankruptcy Judge Craig Goldblatt at a court hearing in Wilmington, Delaware.
"The sale process is well underway at this point," Smith said.
Yellow intends to conduct an auction for the vehicles by Oct 18 and seek court approval for the vehicle sale on Oct. 27.
The company is taking a longer time to sell its real estate assets, despite having a $1.525 billion offer in hand from rival shipping company Estes Express Lines. Yellow has set a Nov. 9 bid deadline and expects to seek court approval for a real estate sale in December.
A longer sale process will allow more competition for Yellow's 300 shipping terminals and other real estate assets, which have already generated significant interest from buyers.
Estes initially offered $1.3 billion for the real estate early in Yellow's bankruptcy, an offer was that was later topped by a $1.5 billion bid from Old Dominion Freight Line.
Smith said Estes' latest bid will provide more than enough cash to pay off the company's $1.2 billion in pre-bankruptcy debt, including $700 million owed on a U.S. Treasury Department bailout loan approved by former President Donald Trump's administration in 2020.
Goldblatt also granted final approval on Friday for a bankruptcy loan of up to $212 million, extended by hedge fund Citadel and equity investor MFN Partners.
Yellow entered bankruptcy with $39 million in cash, and it previously told Goldblatt that the loan would allow it more time to seek the best possible bids for its assets.
Yellow blamed its collapse on a labor dispute with the International Brotherhood of Teamsters union, and it terminated about 22,000 union-represented drivers when it went bankrupt. The union has said the Nashville, Tennessee-based company "mismanaged" its way to bankruptcy.
This article originally appeared on Reuters
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