Source: Trucker bankruptcy rumors ‘overblown’

NEW YORK — An executive from one of the companies called upon to offer a restructuring plan for YRC Worldwide Inc. said Wednesday the prediction the beleaguered trucker will soon file for bankruptcy is “overblown.”

Financial adviser Tenex Capital Management is guiding the company through the steps of restructuring while avoiding a bankruptcy filing. Responding to several reports of impending bankruptcy in an interview with The Associated Press, the person asked to remain anonymous because of the sensitivity of the talks.

“We don’t think filing is the most effective way to do it,” this person said. “We believe there are ways to make this work without bankruptcy.”

The source said the company is currently working to negotiate deals with its bondholders, which he expects to be completed in four to six weeks. Tenex has already worked with the company to make cost cuts and changes to streamline its operations.

This person said working with YRC has been productive, but not without challenges.

“This one has been a little harder than most, but we’ve made a lot of progress,” the executive said.

YRC and Teamsters union officials resumed talks on Wednesday as they work toward a deal to keep the debt-laden trucker out of bankruptcy. But at least one Wall Street analyst doesn’t think they’ll make it.

The Overland Park, Kan.-based company, which runs trucks under names including Yellow and Roadway, negotiated with the union that represents 40,000 of its employees for three days last week before pausing for the holiday weekend. According to the Teamsters for a Democratic Union Web site, the company is asking to push off pension contributions for 14 months, which would save it about $500 million a year. But unlike with previous concessions, the TDU says the company isn’t offering anything in return.

For that reason, Morgan Keegan analyst Art Hatfield said he believes “a successful outcome (is) less likely.” When YRC and the Teamsters agreed to take a 10 percent cut in pay earlier this year to hold up the company’s finances, workers got a 15 percent stake in the company.

In a statement to the Associated Press on Wednesday, a YRC spokeswoman said “We are negotiating in good faith with the Teamsters and are making progress.”

Already-battered shares of YRC dwindled further on Wednesday. They fell 35 cents, or 28.2 percent, to close at a new year low of 89 cents. The stock has ranged from $1.20 to $22.52 over the past year.

Considering the perceived state of negotiations and increasing uncertainty about the outcome, Hatfield said he believes the company will likely file for bankruptcy soon.

Another problem, Hatfield said, is that the company doesn’t have much left to put for collateral in lieu of pension payments or to stave off creditors. It has already sold a number of properties — including its corporate headquarters — to raise cash.

YRC is of the nation’s largest truckers. It has about 49,000 employees.

The trucker has complained publicly about its hefty pension obligations, calling them unfair because it is responsible for people that never worked at YRC under several multi-employer pension plans. But the company has also struggled to hold onto customers as it merged its Yellow and Roadway operations. And the surrounding recession has hit YRC and other truckers hard, as consumers buy less and manufacturing lines slow.