Yellow Corporation has reached proposed agreements resolving approximately $508.16 million in pension claims, potentially ending years of litigation over the trucking company’s withdrawal from several multiemployer pension plans.
A separate claim involving the Local 705 Pension Fund brings the total value of the pension claims currently moving toward resolution to approximately $525.99 million. That separate claim is not one of the newly negotiated settlement agreements, making the widely reported description of a single “$526 million settlement” technically inaccurate.
The agreements must still be approved by the U.S. Bankruptcy Court for the District of Delaware. A hearing is scheduled for September 11.
The proposed settlements stem from Yellow’s July 2023 shutdown, which ended the company’s contributions to pension plans covering thousands of union employees. Yellow terminated approximately 3,500 nonunion employees on July 28, 2023, followed by approximately 22,000 union employees two days later. The company filed for Chapter 11 bankruptcy protection on August 6, 2023.
Breaking down the pension claims
The proposed agreements cover claims held by six pension funds, including two claims acquired by Yellow’s largest shareholder, MFN Partners.
The proposed amounts are:
- New York State Teamsters Conference Pension and Retirement Fund: $300 million
- Teamsters Local 617 Pension Plan: $1.15 million
- Management-Labor Pension Fund Local 1730: $4.38 million
- Western Conference of Teamsters Pension Trust Fund: $126.37 million
- Western Pennsylvania Teamsters and Employers Pension Fund: $71.25 million
- International Association of Machinists Motor City Pension Fund: $5 million
Those agreements total approximately $508.16 million.
Separately, the liquidating trustee has said he will not oppose the Local 705 Pension Fund’s request to have its claim allowed at approximately $17.83 million.
Adding the Local 705 claim to the negotiated settlements produces the frequently reported combined figure of approximately $525.99 million.
The numbers represent allowed or proposed bankruptcy claims. They do not guarantee that the pension funds will receive the full face value of those claims in cash.
What would the average employee receive?
There is no legitimate average employee payment that can be calculated from these agreements.
The approximately $508.16 million in proposed settlements belongs to pension funds as claims against Yellow’s bankruptcy estate. The separate Local 705 claim brings the combined figure to nearly $526 million, but neither amount is an employee compensation fund that will be divided among Yellow’s approximately 25,500 former workers.
Dividing $525.99 million by 25,500 employees produces a theoretical figure of approximately $20,627 per employee. That calculation has no connection to how the money will actually be distributed.
Not every former Yellow employee participated in the affected pension plans. The plans covered different numbers of workers and retirees, and each fund holds its own claim against the bankruptcy estate. Any money recovered will go to the pension funds, not directly into equal settlement checks for former employees.
Individual pension benefits will continue to be governed by each plan’s rules, including credited service, contribution history, retirement age and benefit formulas.
What would employees receive after attorney fees?
That figure also cannot be calculated because the pension claims are not an employee settlement fund.
Yellow’s June operating report showed that the bankruptcy estate had paid approximately $293 million in professional fees and expenses since the Chapter 11 case began. Those expenses cover attorneys, financial advisers and other professionals working throughout the broader bankruptcy.
The $293 million is not an attorney contingency fee being deducted from the pension agreements. It would be inaccurate to subtract that amount from the nearly $526 million in claims and divide the remainder among former employees.
For illustration, subtracting $293 million from $525.99 million would leave approximately $232.99 million. Dividing that amount by 25,500 employees would produce approximately $9,137 per person.
That number is mathematically correct but legally and financially meaningless. The professional expenses and pension claims are separate parts of the bankruptcy, and employees do not hold equal ownership interests in the pension claims.
The honest answer is that former Yellow employees should not expect an average pension-settlement check of either $20,627 or $9,137.
Court previously rejected three agreements
The new proposal follows an April decision in which the bankruptcy court rejected three earlier settlement agreements involving the New York Teamsters, Teamsters Local 617 and Local 1730 pension funds.
The court concluded that the proposed amounts did not sufficiently conform to the five-step methodology used to calculate Yellow’s withdrawal liability.
Under the revised proposal, the New York Teamsters would receive an allowed claim of $300 million, down from the $326.5 million previously requested. However, the new amount remains approximately $22.4 million higher than the $277.6 million calculation the trustee said would result from the court’s methodology.
Teamsters Local 617 would receive an allowed claim of $1.15 million, down from its previous $3 million request. The court had previously indicated it would approve approximately $100,000.
Local 1730 would receive an allowed claim of approximately $4.38 million, down from the $7.5 million previously requested.
The trustee argued that the compromises are reasonable because they eliminate the risk and expense of continued litigation and possible appeals.
Pension funds may receive only part of their claims
The allowed claim amounts should not be confused with guaranteed cash payments.
Yellow reported approximately $593 million in cash in its June operating report. That money must cover claims and expenses across the bankruptcy estate, not only pension liabilities. The final amount recovered by each pension fund will depend on the distribution percentage, available cash, the priority of other claims and the bankruptcy court’s final orders.
Pension claims may also receive different aggregate recovery percentages than many other unsecured claims because several pension liabilities were asserted against multiple Yellow debtors.
The settlement motion says resolving the pension disputes would allow the liquidating trust to begin making meaningful distributions to general unsecured creditors. It does not promise full payment of the allowed pension claims.
Employee wage and PTO claims are separate
The pension agreements are separate from former employees’ claims for unpaid wages, unused vacation time, sick leave and alleged violations of the federal Worker Adjustment and Retraining Notification Act.
Eligible paid-time-off and sick-leave claims have been classified as priority claims and are expected to be paid through the liquidation process. Those payments will be based on each worker’s approved employee claim, not the nearly $526 million pension figure.
Some former Yellow workers represented by private attorneys previously received payments through separate WARN Act settlements. Those payments have no connection to the latest pension agreements.
Settlement could end years of litigation
Yellow and MFN Partners previously argued that federal assistance provided to troubled pension plans under the American Rescue Plan Act should reduce or eliminate Yellow’s withdrawal liability.
The Third Circuit Court of Appeals rejected that argument in September 2025. The court concluded that federal regulators acted within their authority by preventing pension-assistance money from being used to reduce an employer’s withdrawal liability. The U.S. Supreme Court later declined to hear the appeal.
Under the latest agreements, MFN would abandon its pending appeals and waive certain rights to seek legal fees and expenses. The settlements would resolve disputes involving the Western Pennsylvania Teamsters and IAM Motor City claims acquired by MFN, along with the claims involving the New York Teamsters, Local 617, Local 1730 and the Western Conference.
If approved, the agreements would remove one of the largest remaining obstacles to final distributions from Yellow’s bankruptcy estate.
For former workers, however, the bottom line remains unchanged: The nearly $526 million figure represents pension claims moving toward resolution, not money that will be divided into individual employee checks. There is no accurate average payment before or after attorney fees.
