Trucking Co. dismisses concerns over $ 700 million COVID-19 bailout
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Law360 (June 10, 2021, 8:48 p.m. EDT) – A trucking company has defended its receipt of a $ 700 million federal pandemic loan that a congressional subcommittee is investigating, saying Thursday that the panel’s concerns about its Loan eligibility was based in part on a third party’s “incomplete” information.
Last week, the select subcommittee on the coronavirus crisis announced that he was investigating if Yellow Corp. – formerly known as YRC Worldwide Inc. – had been eligible to receive funds earmarked for companies “essential to the maintenance of national security”. In public letters demanding that the White House and Yellow Corp. provide further information on the loan, Representative James Clyburn, DS.C., cited monitoring reports questioning the contribution of Yellow Corp. to national defense.
But Yellow Corp. CEO Darren D. Hawkins dismissed the criticism, saying Clyburn omitted critical details in his public requests for information, according to a letter obtained by Law360.
âPlease allow me to draw your attention to the following facts which you do not mention in your letter,â he said.
In July 2020, the US Department of the Treasury announced the loan to Yellow Corp., which was later transferred by YRC Worldwide Inc., claiming that the company provided 68% of the US Department of Defense partial or LTL shipments. services.
The loan attracted quick review from the Congressional Oversight Committee, which later reported that it was unable to corroborate this figure. The committee found that Yellow Corp. performed between 20% and 40% of the DOD’s freight transport, based on records from Crowley Logistics, the prime contractor for some of Yellow Corp’s defense contracts.
But Hawkins stuck to the DOD estimates. The vast majority of Yellow Corp’s freight transport came directly from DOD through voluntary tenders, information Crowley would not have.
âCrowley’s estimate is incorrect because it has an incomplete picture of the total freight forwarding services Yellow provides to the DoD,â he said.
He countered the reported “anomalies” in the loan approval process, namely the Treasury’s decision to expedite the application based on Yellow Corp’s financial need. No other loan applicant experienced expedited processing, and the Treasury did not finalize its approval process until months after the Yellow Corp loan was issued.
Hawkins further stated that Yellow Corp. had used the funds exactly as planned and had been transparent about his intention to use half of the proceeds for long-term investments in trailers and tractors – a stern rebuke to claims that the capital investments didn’t were not part of a loan.
Yellow Corp. will cooperate with the investigation and deliver the requested records, according to the letter.
The documents âwill conclusively confirm that the information provided by the company when applying for the loan was completely accurate and that the use of loan funds was and is fully appropriate, transparent and in full compliance with the agreements. loan, âsaid Hawkins.
The subcommittee did not immediately respond to requests for comment.
–Editing by Rich Mills.
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