Trucker Yellow Paid Executives Millions Just Before Bankruptcy

Yellow paid bonuses totaling about $4.6 million to eight current and two former executives in the weeks before the company went bankrupt with plans to liquidate, according to corporate disclosures in Delaware bankruptcy court. The figure is higher than it would have been had Yellow managed to avoid a sudden bankruptcy filing, according to a person familiar with the matter.

So-called retention bonuses are common in major restructurings, as they incentivize employees to stick around and help clean up failed firms. It’s less common to pay them prior to a bankruptcy filing when, as with Yellow, the company in question is shutting down for good. Yellow also said it paid retention bonuses totaling roughly $249,000 to its former chief commercial officer and $23,000 to its former senior vice president of human resources. The company paid those bonuses because when it filed bankruptcy it explored the possibility of selling its logistics business as a going concern rather than shutting it down, the person said, but key lenders didn’t support that idea.

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