Former Yellow Corp. employees could finally receive payment for unused vacation and accrued sick leave, almost three years after the less-than-truckload carrier ceased operations. However, some hurdles remain to be cleared, according to a Wednesday memo from the Teamsters to Yellow’s local unions.
A federal bankruptcy court in Delaware approved a final liquidation plan in November, calling for the proceeds from the sale of Yellow’s assets to be placed in a liquidating trust. The transition is now expected to occur in June or July. (Employee claims were classified as priority by the plan and are required to be paid.)
However, the parties still haven’t reached a settlement on the value of the claims. Also, Yellow’s largest shareholder, hedge fund MFN Partners, appealed a pension withdrawal liability settlement, but the memo said the final bankruptcy plan can still move forward.
“Throughout 2025 and 2026 the Teamsters have engaged with Yellow in settlement negotiations related to the Union’s contract-based claims against Yellow,” the memo said. “These claims include accrued and unused paid-time-off as well as individual and group grievances. While substantial progress has been made on agreeing to the amounts of these claims that should be allowed, there are a few disagreements on valuation that still must be resolved.”
The liquidating trustee will be responsible for resolving remaining claims and making distributions to creditors, including former employees. The memo noted that the bankruptcy court will need to approve any settlements reached between the Teamsters and the trustee. It also said other creditors of Yellow’s estate can object to any settlement reached or appeal any settlement the court approves.
Funds managing Yellow’s healthcare and pension plans have entered separate claims for unpaid contributions.
An April operating report for Yellow’s estate showed a $601 million cash balance.
Last year, the court denied WARN Act claims against Yellow, alleging the company failed to provide adequate notice ahead of mass layoffs. However, the Teamsters appealed the decision and are awaiting the outcome of the appeal.
“The Teamsters will attempt to settle with the Liquidating Trustee any remaining contract claims as well as the WARN claims,” the memo said.
The memo told former employees to keep their addresses updated with their local unions. The trustee is expected to distribute future payments via direct deposit or by mail for members who have since closed their bank accounts.
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