By Rob Kozlowski
Source: Pensions & Investments

Defunct trucking company Yellow Corp. is liable for $6.5 billion in withdrawal liability to be paid to the 11 multiemployer pension plans it exited after shuttering in 2023, a bankruptcy judge has ruled.

In his Sept. 13 ruling in U.S. Bankruptcy Court in Wilmington, Del., Judge Craig Goldblatt said the company, which ceased operations in July 2023, is liable for its share of unfunded vested benefits as a result of withdrawing from the 11 multiemployer pension plans despite those plans receiving a total of $40 billion in special financial assistance from the Pension Benefit Guaranty Corp.

Yellow Corp. had argued that federal funds awarded under the American Rescue Plan Act of 2021 should count as “plan assets” in calculating the plans’ unfunded vested benefits, which would either reduce or eliminate their withdrawal liability. However, the 11 multiemployer plans did not take into account the influx of government cash when calculating Yellow’s withdrawal liability.

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