Dive Brief:
- Inspectors found leaky roofs and damaged parking lots, among more than $27 million worth of repair and maintenance needs at Yellow Corp.’s facilities, according to the Estes Express Lines, the stalking horse bidder for the properties.
- The shuttered LTL apparently began month-to-month parking subleases at properties in New Jersey and Washington, Estes’ attorneys wrote in a filing this month. “Estes was not informed of the Subleases and did not consent to such Subleases as required,” it said.
- Estes requested payment of the nearly $28 million in total costs it said Yellow owes, which beyond the maintenance and repairs includes rent, taxes and late fees to relieve leased properties from default.
Deferred maintenance needs at Yellow’s facilities
Dive Insight:
As nearly 170 terminals head to a bankruptcy court-supervised auction scheduled later this month, Estes is first in line with a guaranteed $7.5 million breakup fee and $1.6 million in expense reimbursement locked in.
But it’s not difficult to imagine Estes executives’ displeasure in reading the inspection reports calling for roof replacements and other significant repairs. Additional rent, real estate tax and late fee payments due total nearly $683,000, according to the filing.
Three of the unauthorized parking subleases were with tire disposal, trucking and logging companies at the facility in Tacoma, Washington, according to the filing. Yellow also inked a fourth parking sublease with a security company at its Kearny, New Jersey, site, generating $32,955.
Estes said the Tacoma and Kearny leases could not be assumed until the subleases are terminated, and it asked the court to require the prevailing bidder to provide Estes with adequate assurance of future performance under the leases.
Horse-trading is likely as Estes, Old Dominion, ArcBest and others have either bid or signaled interest in the properties. An auction is scheduled for Nov. 28 if needed.
Auctioneers Ritchie Bros. and Nation’s Capital will auction Yellow’s trucks, trailers and forklifts in a separate process over the next year.
