American trucking company Yellow (YELL) has ceased operations and is planning to file for Chapter 11 bankruptcy protection from its creditors.
The Teamsters Union, which represents Yellow’s trick drivers, confirmed that the company is shutting down.
Earlier in July, Yellow averted a threatened strike by 22,000 Teamsters-represented workers and last week said it was exploring opportunities to divest its third-party logistics company.
Yellow has been labouring under $1.3 billion U.S. of debt and has failed to restructure the amount owed on its own.
The company was the third-biggest U.S. trucking company that specialized in combined shipments from different customers in the same trailer.
Yellow’s marquee customers included large retailers such as Walmart (WMT) and Home Depot (HD). There are concerns that some of those retailers’ goods could now be stranded.
Part of the debt Yellow owes is a $700 million U.S. pandemic relief loan provided in 2020 by the U.S. federal government in exchange for a 30% stake in the company.
Media reports in recent days have stated that Yellow has sent notices to customers about the end of its operations, as well as layoff notices to non-unionized staff.
Yellow’s stock has declined 85% over the last 12 months to trade at $0.71 U.S. per share.