Delaware

Delaware bankruptcy court says Yellow owes pensions, stock drops 90%

Published

2 months ago

September 13, 2024

Delaware bankruptcy court says Yellow owes pensions, stock drops 90%

Shares of Yellow fell 90% Friday afternoon following a Delaware court’s decision on its pension liabilities. (Photo: Jim Allen/FreightWaves)

A Delaware bankruptcy court provided some clarity late Friday regarding $6.5 billion in withdrawal liability claims against Yellow Corp. The total amount the bankrupt less-than-truckload company will actually pay, however, remains to be decided. The mere fact that the estate will have to make good on some portion of the claims sent Yellow’s stock spiraling.

Shares of Yellow (OTC: YELLQ) fell 90% on Friday to 50 cents per share as stockholders realized their bet that the company’s asset value would exceed amounts owed to creditors may not come to fruition.

MFN Partners, which acquired a more than 40% equity stake in Yellow in the day’s leading up to a bankruptcy filing last summer, is the largest holder. However, the Boston-based private equity firm provided the company with bankruptcy financing during its liquidation, the interest and fees from which have helped offset its equity exposure.

The U.S. Treasury holds a 30% stake in Yellow. The equity was issued as part of a collateral package for a $700 million Covid-relief loan it provided to the company in 2020.

Multiemployer pension plans (MEPPs) to which Yellow once contributed claim the carrier’s abrupt shutdown a year ago means it’s now on the hook for its allocable share of unfunded vested benefits. However, Yellow has said that the plans are fully funded now, following a 2021 pension fund bailout package (the American Rescue Plan Act). Yellow contends its exposure is a fraction of the amounts claimed, if anything.

The legislation provided pension insurer Pension Benefit Guaranty Corp. the authority to craft guidelines to make sure the money would only be used to cover plan benefits and costs, and not to allow employers to skirt withdrawal liability.

Pension Benefit Guaranty Corp. created two regulations. The first said special financial assistance awarded to the MEPPs wouldn’t be recognized as a plan asset until the money was actually received. The second mandated the recognition of the funds would be phased in over time even though they were distributed in a lump sum.

The organization said the goal was to keep other contributing employers from using the bailout as a way to exit the plans. Immediate recognition would mean the MEPPs are fully funded, removing any unfunded vested benefits and consequently an employer’s withdrawal liability. That could have created a mass exodus from the plans, PBGC claimed.

Judge Craig Goldblatt’s Friday opinion sided with both the MEPPs and to an extent Yellow.

He said PBGC acted within its authority when putting up the guardrails on the program and that the MEPPs didn’t have to recognize the payments as an asset until received, and that they could be phased in. The implication is that Yellow is now responsible for some form of withdrawal liability to 11 different MEPPs that received government funds.

Central States Pension Fund holds nearly $5 billion in withdrawal liability claims against Yellow. It was awarded $35.8 billion in special financial assistance on Dec. 5, 2022, but didn’t receive the funds until Jan. 12, 2023, after its plan year ended. Yellow filed for bankruptcy on Aug. 6, 2023. The unfunded vested benefit calculation used plan year 2022 to determine the amount owed.

“The regulations implement Congress’s specific directive in the American Rescue Plan Act that special financial assistance be used only to pay plan benefits and costs,” Goldblatt said. “The regulations prevent such funds from instead being used, in effect, to reduce amounts that employers would otherwise be required to pay upon withdrawal from a plan.”

However, Goldblatt also entered a partial summary judgment in favor of Yellow, citing that the 20-year cap (established by the Employee Retirement Income Security Act) should be placed on the company’s total withdrawal exposure. Essentially, the court ruled that Yellow is responsible for 20 times its annual contribution amount per the statute. Past court filings from Yellow have estimated a total liability of roughly $1 billion when using the 20-year cap.

Yellow previously asserted discounting to present value should apply to the 20-year stream of payments. However, Goldblatt said its default on the contributions accelerates the amounts to “presently due and owing,” and no discounting is needed.

He also upheld an agreement inked between Yellow and Teamsters funds in New York and Western Pennsylvania. Yellow reentered those funds in 2013 under a deal in which it would contribute just 25% of the usual rate, but it would repay any withdrawal liabilities assuming a 100% contribution rate if it withdrew.

Goldblatt directed the parties to hash out the actual amounts due. He said the task may be “relatively easy to resolve” now that the court has ruled on the disputed legal questions.

Yellow still faces a much smaller pool of withdrawal liability claims from pensions that didn’t receive special financial assistance.

The 11 MEPPs party to the Friday opinion received more than $40 billion in assistance from the government.

More FreightWaves articles by Todd Maiden

The post Delaware bankruptcy court says Yellow owes pensions, stock drops 90% appeared first on FreightWaves.

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Delaware

Here are 9 holiday light shows to catch this season in the Delaware, Philadelphia region

Published

7 hours ago

November 23, 2024

Press Room

Here are 9 holiday light shows to catch this season in the Delaware, Philadelphia region

From walks to drive-thrus, there are plenty of opportunities to catch a holiday light show this season.

Various shows and events are taking place throughout Delaware and across the Philadelphia region this year.

Here are nine holiday light shows to check out:

Longwood Gardens

Spectators of the holiday light show at Longwood Gardens are in for a special treat this year as “A Longwood Christmas” kicks off amid the opening of “Longwood Reimagined.”

The expansion features new spaces like the West Conservatory, which will offer new areas to deck out for the holidays.

Longwood Gardens, located near Kennett Square, Pennsylvania, launched its holiday light display on Friday, Nov. 22, and it will run daily through Jan. 12. To make a reservation, visit the sprawling garden’s website.

Address: 1001 Longwood Road, near Kennett Square, Pennsylvania

Website: longwoodgardens.org

Yuletide at Winterthur Museum, Garden and Library

Holidays at the Winterthur Museum on Route 52 features twinkling lights adorning the woodlands, a large-scale gingerbread house and an 18-room dollhouse, according to the museum’s website.

The holiday display will be open to the public starting Saturday, Nov. 23, and will run through Sunday, Jan. 5.

You can purchase tickets online or by calling the museum at 800-448-3883.

Address: 5105 Kennett Pike, Winterthur, Delaware

Website: winterthur.org/

Holidays at Hagley

Get a glimpse of Hagley Museum and Library around the holidays with a holiday home and garden tour.

The site features a gingerbread house contest, Santa day, holiday night tours and more.

The holiday experience at Hagley runs from Sunday, Nov. 29 through Wednesday, Jan. 1. Purchase tickets online to schedule your holiday tour.

Address: 200 Hagley Creek Road, Greenville, Delaware

Website: hagley.org/

Drone show at the Riverfront

The Wilmington Riverfront during the evening hours of Friday, Dec. 6, will host a drone holiday light show.

The free holiday light show will take place on the Riverwalk. For more information about the event, visit the Riverfront’s website.

Address: Michael S Purzycki Riverwalk in Wilmington, Delaware

Website: riverfrontwilm.com/event/drone-light-show

Shady Brook Farm

If you are willing to take a drive for a holiday light display, look no further than Yardley, Pennsylvania’s Shady Brook Farm.

You can drive through the holiday show yourself or take a wagon ride through. The holiday festivities begin Saturday, Nov. 23 and run through Jan. 5, 2025. Ticket prices are per vehicle and vary depending on the day of your visit.

The farm also features Santa’s Village with gifts, treats, firepits and a Candy Cane Lane walk-through.

Address: 931 Stony Hill Road, Yardley, Pennsylvania

Website: shadybrookfarm.com

Gift of Lights Dover

The Dover Motor Speedway will once again host its drive-thru holiday light show this year.

Tickets are priced per carload at $35 per car and $60 per bus or limo.

Address: 1229 Persimmon Tree Lane, Dover, Delaware

Website: giftoflights.ticketspice.com/gift-of-lights-dover

The Brandywine Railroad

Since 1972, the Brandywine Railroad has displayed model trains, including locomotives, passenger and freight trains, and trolleys as part of its annual holiday display.

The display also features interactive options like “push buttons and foot pedals” so visitors can engage with the train setup.

The holiday display began on Saturday, Nov. 16, and runs through Jan. 5. For more information visit the Brandywine Museum of Arts’ website.

Address: 1 Hoffman’s Mill Road, Chadds Ford, Pennsylvania

Website: brandywine.org/museum

Holiday Lights Express

Take a festive ride on 100-year-old heated coaches through the Red Clay Valley to see homes decorated for the holidays.

The Wilmington & Western Railroad hosts one-hour evening train rides during the month of December. To purchase train tickets, visit the venue’s website.

For a visit from Santa Claus, be sure to reserve train tickets for the Santa Claus Express.

Address: 2201 Newport Gap Pike, Prices Corner, Delaware

Website: wwrr.com/ride/events/holiday-lights

NOËL at Nemours Estate

Experience the holidays at the Nemours Estate by touring the 77-room mansion, chauffer’s garage and gardens adorned in twinkling lights.

The estate also will feature live music performances throughout the season.

The festivities at the Nemours Estate began Tuesday, Nov. 19 and will extend through Sunday, Dec. 29. Purchase tickets on the estate’s website and reserve your visit.

Address: 1600 Rockland Road, Rockland, Delaware

Website: nemoursestate.org

Got a tip? Contact Amanda Fries at afries@delawareonline.com. Follow her on X at @mandy_fries.

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Delaware

Dolgeville vs Delaware Academy

Published

15 hours ago

November 23, 2024

Press Room

N. Scott Trimble

High School football 2024 Class D playoffs: Dolgeville vs. Delaware Academy

Dolgeville battles Delaware Academy at Cicero-North Syracuse Friday, November 22, 2024 for the Class D playoffs. (N. Scott Trimble | strimble@syracuse.com)Get Photo

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Delaware

The Delaware Springboard Villages to build a new community center – 47abc

Published

23 hours ago

November 22, 2024

Press Room

The Delaware Springboard Villages to build a new community center – 47abc

GEORGETOWN, Del. – The Delaware Springboard Villages announced Friday, that they would be breaking ground on a new community center. Co-founder of the organization, Jeffrey Ronald thinks this new center will bring more unity into the neighborhood.

“Breaking ground on this community center is not just for the participants of the Springboard Village. It’s for the broader Georgetown community where they will have access to job training, life skills like financial planning, communication skills, and healthcare.”

The state-of-the-art facility will feature computer labs, a telehealth conference room, staff offices, and a commercial kitchen. These resources will help guests toward self-sufficiency.

Executive Director, of Springboard Delaware, Judson Malone thinks this can be life-changing for those in need.

“It gives them a completely new perspective, and it is incredible when people come from the woods. It’s almost transformational, their whole outlook changes, and so the community center is going to build on that.”

According to Springboard Delaware, nearly 25% of guests have gained full employment. Around one-third have transitioned to permanent housing. Ronald is excited about the future of the Springboard Villages.

Governor-elect, Matt Meyer supports the organization. Ronald believes this will only grow stronger. “Matt Meyer who spearheaded the Hope Center, has been to the Springboard Village. He has kindly declared, and we think wisely declared, that he wants to replicate this model across the entire state. Hoping to help disadvantaged Delawareans build a better life.”

The villages are located on the property of the First State Community Action Agency behind their Georgetown headquarters. It houses up to 40 individuals.
It is the expectation they come in with a plan to find full employment.

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