Yellow Corporation [NASDAQ: YELL] CEO Darren Hawkins is confident that he can show lawmakers that his company’s $ 700 million CARES Act loan, which is being scrutinized in a new parliamentary investigation, is fully compliant with loan terms.
“As for your question about our’fund eligibility and use’, the subcommittee’s inquiry and Yellow Corporation documents are final that the information we provided when applying for the loan was completely accurate. The loan funds were perfectly appropriate, transparent, and fully compliant with the loan agreement, “Hawkins said in a letter, an excerpt from Freightwave. Sent Thursday to the Selection Subcommittee on the Coronavirus Crisis.
Subcommittee The investigation started on June 3rd..
The main source of the loan controversy, which has been under investigation since it was approved last year, is the question of whether Yellow’s less than truck (LTL) contract with the US Department of Defense (DOD) controlled sufficient shipments. An important amount to maintain national security.
Yellow said the DOD certification that Yellow provides 68% of LTL services to the department is accurate, and the low estimate between 20% and 40% provided by Yellow’s subcontractor Crowley Logistics is incorrect. Insisted. Crowley also speculated that Yellow’s DOD capacity could be “easily replaced by other companies in the trucking industry”-inaccurate, according to Yellow.
According to Hawkins, Crowley’s assessment derives from Crowley’s “imperfect picture” of the freight services he provides to DOD and other government agencies.
For example, from March 2020 to February 2021, 25.2% of Yellow’s DOD shipments (48,653 out of 193,322) were procured from Crowley, and the remaining shipments were procured directly from the DOD. “In other words, Crowley’s contract accounts for only one in four shipments made for the Pentagon.”
Hawkins also emphasized that the CARS Act lending helped his company secure the liquidity needed to:
- It remains an important link in many supply chains in the United States, completing millions of freight shipments, including hundreds of thousands to the Department of Defense.
- Approximately 30,000 employees, including 24,000 union employees (mostly Team Stars), continue to work day and night on loading docks, freight warehouses, and American highways, with urgent military supplies and personal use. We will enable uninterrupted delivery of protective equipment and household items. Medicines, food and other necessities.
- Allow pensioners and employees to continue to meet their obligations to cover their medical costs.
- You can combat global warming by modernizing your vehicle with safer and more fuel efficient trucks and trailers, transforming your business and returning to a profitable business.
The Commission requested Yellow to prepare a list of eight types of loan-related documents by June 17. For our documentation, “Hawkins said.
https://www.freightwaves.com/news/yellow-defends-transparency-of-cares-act-loan Yellow defends CARES Act loan transparency