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NEW YORK, Oct 27 (Reuters) - Bankrupt freight trucker Yellow Corp (YELLQ.PK) received U.S. court approval on Friday to hire auction houses to sell off its vehicle fleet over several months.
U.S. Bankruptcy Judge Craig Goldblatt approved Yellow's proposal at a court hearing in Wilmington, Delaware, after ordering the auction houses to make additional disclosures to the court about how they will be compensated and any connections they have to companies that may bid on the vehicles.
Goldblatt's order resolved objections that had been raised by the U.S. Department of Justice's bankruptcy watchdog, the office of the U.S. Trustee, about potential conflicts of interest in the sale process.
Yellow Corp had previously sought to rapidly offload its entire vehicle fleet to avoid paying rent, maintenance and vehicle storage costs during a lengthy sales process. Yellow owns approximately 11,700 tractors and 34,800 trailers, and it has additional leased vehicles.
The company will now turn over the sale process to Nations Capital, Ritchie Bros. Auctioneers and IronPlanet Inc., which have agreed to take possession of the vehicles during the sale process, according to court filings.
The company, headquartered in Overland Park, Kansas, was the third-biggest U.S. trucker specializing in the less-than-truckload segment that combines shipments from different customers in the same trailer.
Yellow has said that its vehicles and equipment have previously been appraised at a $900 million value, but it acknowledged that the appraisal may not be up to date. Yellow has sales targets for the auctioneers, with $475 million on the low end and $800 million at the high end.
Yellow, which filed for bankruptcy in August, is selling its vehicle fleet separately from its shipping centers and other real estate. Yellow has received a $1.525 billion bid for its real estate assets from rival trucking company Estes Express Lines, but it continues to seek higher bids.
Yellow blamed its collapse on a labor dispute with the International Brotherhood of Teamsters union, and it terminated about 22,000 union-represented drivers when it went bankrupt. The union has said the company "mismanaged" its way to bankruptcy.
The case is In re: Yellow Corp, U.S. Bankruptcy Court for the District of Delaware, No. 23-11069.
For Yellow: Allyson B Smith of Kirkland & Ellis; Laura Davis Jones of Pachulski Stang Ziehl & Jones; among others.
Read more:
Bankrupt trucking company Yellow eyes October sale of vehicle fleet
Teamsters union pushes for US bankruptcy reform after Yellow's collapse
US trucking firm Yellow files for bankruptcy, blasts Teamsters
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