Judge Goldblatt rules on pension funds – Yellow Corp. shareholders worried about repayment

The insolvent logistics company Yellow Corp. and its hedge fund owners suffered a significant defeat in a key court case involving $6.5 billion in debt claimed by pension funds. The decision could result in an almost total loss for the company's shareholders. U.S. Bankruptcy Judge Craig T. Goldblatt sided with the pension funds on the calculation of penalty payments that Yellow must make for terminating its employees' pension plans. The company ceased operations last year. The ruling, issued last week, significantly reduces the likelihood that any capital will remain for shareholders like hedge fund MFN Partners after the sale of Yellow's real estate portfolio and the settlement of pension liabilities. With this decision, investors' hopes of recovering at least part of their investments have been almost entirely extinguished. Therefore, the sale of the company’s assets could largely be used to settle the debts owed to the pension funds. This leaves little to no room for any significant repayment to shareholders, whose future prospects now appear more than uncertain.