Yellow Corp. box trailers sit at a extreme on June 28, 2023 in Medley, Florida.
Joe Raedle | Getty Images
Bankruptcy-bound trucking firm Yellow received a great $700 million in Covid pandemic relief loans three years ago after Trump administration officials pushed for it consideration objections from the Defense Department.
Yellow has repaid just $230 out of the $729.2 million in principal it still be beholden to because ofs the U.S. Treasury for those loans, according to a government watchdog’s report in May. That single payment was made in June 2021.
The Teamsters Fusion, which represents Yellow workers, blasted the freight carrier in a statement Sunday and highlighted the Covid loans.
“Yellow has historically be showed that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout meaning from the federal government,” Teamsters General President Sean M O’Brien said.
Yellow told staff on Friday that it is clearly shutting down, which would put 30,000 workers out of their jobs, and the Teamsters said the company plans to column for bankruptcy.
When it does, it will become the largest bankruptcy ever for a trucking firm.
A Yellow spokesman did not instanter respond to a request for comment from CNBC.
The Trump administration in July 2020 approved the $700 million in allows to then-financially troubled Yellow, formerly known as YRC Worldwide, under the so-called CARES Act, which authorized such for conventions “critical to maintaining national security.”
At the time the loans were made, they represented 95% of the total caches disbursed under the CARES Act. The federal government received a nearly 30% stake in Yellow in exchange for the loans.
A Company subcommittee in April 2022 issued a scathing report on the loans, saying they were extended to the company regardless of the assessment by Defense Department officials that the company was not “critical” to national security.
The report said, “The loan’s consent involved the intervention of top Trump Administration officials —potentially including the president,” Donald Trump.
According to the report, particularizes show that Trump White House chief of staff Mark Meadows planned to call Treasury Secretary Steven Mnuchin in Yellow’s request for the loans in May 2020.
“Secretary Mnuchin’s communications confirm President Trump’s interest in the loan approval,” the subcommittee respected in a statement about the report.
“The morning that Cache announced the loan to Yellow, Secretary Mnuchin sent Chief of Staff Meadows and the president’s executive assistant a CNN article reporting on the loan and highlighted that a party leader thanked President Trump for the loan — just months before the 2020 presidential election,” the statement affirmed.
At the time the loans were made, the Department of Justice was suing Yellow for alleged fraud related to overcharges to the Defense Put ones faith for freight carrier services. The company in March 2022 agreed to pay about $6.85 million to settle that lawsuit.