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Dive Brief:
- Inspectors found leaky roofs and damaged parking lots among more than $27 million worth of repair and maintenance needs at the Yellow Corp. facility, according to Estes Express Lines, the racetracker pursuing the properties.
- Closed LTL apparently began subleasing parking on a month-to-month basis at properties in New Jersey and Washington, Estes’ lawyers wrote in a deposit this month. “Estes was not notified of the Subleases and did not consent to such Subleases as required,” it said.
- Estes sought payment of the nearly $28 million in total costs Yellow said it owed, which in addition to maintenance and repairs includes rent, taxes and late fees to release the leased properties from default.
Deferred maintenance needs at Yellow facilities
Cost estimates for needed repairs at more than a dozen locations.
Dive Insight:
As nearly 170 terminals head to a bankruptcy court-supervised auction scheduled for later this month, Estes is the frontrunner with a guaranteed $7.5 million breakup fee and $1.6 million in expense reimbursements locked up.
But it’s not hard to imagine the displeasure of Estes executives reading the inspection reports calling for roof replacements and other major repairs. The additional rent, property tax and late fee payments total nearly $683,000, according to the filing.
Three of the unauthorized parking subleases involved tire disposal, trucking and logging companies at the Tacoma, Wash., facility, according to the filing. Yellow also signed a fourth parking sublease with a security company at its Kearny, New Jersey location, generating $32,955.
Estes said the Tacoma and Kearny leases could not be assumed until the subleases were terminated and asked the court to require the prevailing bidder to provide Estes with sufficient assurance of future performance under the leases.
Horse trading is likely as Estes, Old Dominion, ArcBest and others have either bid or expressed interest in the properties. If necessary, an auction is scheduled for November 28.
Ritchie Bros. Auctions and Nation’s Capital will auction off Yellow’s trucks, trailers and forklifts in a separate process next year.