May 29, 2009: Yellow Roadway (YRC) is still in talks with various Teamster pension plans regarding their proposal to post real estate as collateral, in lieu of pension payments for the rest of 2009.
Talks are being coordinated by the Central States Fund for a group of pension funds. Teamsters close to the talks have not been able to give us a timeline for a resolution to the pension issue.
YRC is two months behind on payments to most of the funds, at the rate of about $40 million per month.
The pension funds each have a fiduciary duty to make sure that the real estate involved is actually worth the amount YRC owes the fund, and that the funds have legal claim to that real estate (ahead of banks and other creditors) in the event of a default.
On May 20, the Western Conference of Teamsters Pension Fund sent YRC a letter demanding payment for March and April obligations. The Western fund is involved in the talks, but is covering its bases with a paper trail demanding payment, as it does routinely when an employer falls behind.
Also on May 20, Harrisburg Local 776 wrote to the International Union requesting action to force YRC to meet its pension obligations. Local 776 also wrote to the Central Pennsylvania Pension Fund objecting to that fund’s move to freeze pension accruals of YRC Teamsters for the rest of the year.
On May 27, the International Union issued a bulletin to YRC Teamsters headed “Important Information,” but it didn’t contain any information. It suggested YRC Teamsters “remain patient.”
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