Yellow Estate Reaches $526 Million Settlement with Four Multiemployer Pension Plans

The estate of Yellow Corp. has reached a settlement with four multiemployer pension plans worth up to $526 million, as the company’s bankruptcy proceedings continue. The proposed agreement, which has the support of Yellow’s largest shareholder, MFN Partners, will be reviewed by the U.S. District Court for the District of Delaware on September 11. The settlement follows court rulings that upheld pension fund claims tied to Yellow’s bankruptcy withdrawal liability.

The four pension plans, which include the New York Teamsters Conference Pension & Retirement Fund, Teamsters Local 617, Teamsters Local 1730, and the Western Conference of Teamsters Pension Trust Fund, will receive a total of at least $300 million, $1.15 million, $4.38 million, and $126.4 million, respectively. The settlement also includes payments to the Western Pennsylvania Teamsters and Employers Pension Fund and the International Association of Machinists Motor City Pension Fund. The bankruptcy court had previously approved a settlement agreement with most of the multiemployer pension plans, which could receive over $1 billion. Yellow’s withdrawal from the pension plans in August 2023 led to a dispute over withdrawal liability payments, with the Pension Benefit Guaranty Corp. backing the funds’ claims.

The company’s administrators and MFN Partners argued that the liability assessments should be lower due to the funds receiving billions of dollars from the Special Financial Assistance Program under the American Rescue Plan Act. The U.S. Court of Appeals for the Third Circuit and the Supreme Court have ruled in favor of the pension funds, affirming that Yellow is liable for the withdrawal payments. The settlement is part of Yellow’s ongoing bankruptcy proceedings, which began in August 2023 and led to the termination of 22,000 unionized employees and 8,000 nonunion employees.