Former Yellow Corp. employees might finally see money for unused vacation and sick leave after nearly three years, as a Delaware bankruptcy court approved a liquidation plan and a liquidating trust prepares to take over. Negotiations between the Teamsters and the liquidating trustee are close but unresolved, and a few legal and valuation hurdles could still delay payouts.
Could Yellow Corp. workers finally get paid? That headline matters because employees have been waiting since the carrier shut down. The bankruptcy plan funnels proceeds from asset sales into a trust meant to cover priority claims, which explicitly includes employee claims for accrued paid time off and other contract-based entitlements.
Officials expect the transition to the liquidating trust in June or July, and that timeline is what has pushed talk of actual payments into the near future. Still, the parties have not fully agreed on how to value every claim, so the trust will need to sort out remaining disagreements and obtain court approval before funds move.
“Throughout 2025 and 2026 the Teamsters have engaged with Yellow in settlement negotiations related to the Union’s contract-based claims against Yellow,”
The Teamsters’ memo keeps the language tight, and it notes progress while admitting a few sticking points. “These claims include accrued and unused paid-time-off as well as individual and group grievances. While substantial progress has been made on agreeing to the amounts of these claims that should be allowed, there are a few disagreements on valuation that still must be resolved.”
The liquidating trustee will carry responsibility for resolving claims and distributing assets to creditors, including former workers. Any settlement the Teamsters strike with the trustee still requires approval from the bankruptcy court, and other creditors can object or appeal those approvals, which adds another layer of delay risk.
Outside the central contract claims, funds that managed Yellow’s healthcare and pension plans have filed separate claims for unpaid contributions, so those demands will be carved into the estate’s overall picture. The estate itself looked reasonably well funded in recent reporting, with an April operating report showing roughly $601 million in cash on hand, which gives some real backbone to expectations of payouts.
There’s also litigation in the background. Last year, a court denied WARN Act claims that alleged Yellow failed to give proper notice before mass layoffs, and the Teamsters have appealed that denial. The memo makes clear the union intends to try to settle both remaining contract claims and the WARN issues with the liquidating trustee, a move aimed at simplifying distribution once the trustee starts writing checks.
“The Teamsters will attempt to settle with the Liquidating Trustee any remaining contract claims as well as the WARN claims,”
Administrative details matter for payments. The Teamsters told former employees to keep their addresses current with local unions so the trustee can reach them, and the memo said distributions will be made by direct deposit where possible or mailed if accounts have been closed. That means people who moved or neglected paperwork could face extra wait time or risk missing notices.
No one is promising instant cash, but the combination of a court-approved liquidation plan, a sizable cash balance in the estate, and active negotiations with the Teamsters has pushed the question of payouts from theoretical to practical. The final steps are procedural and legal: settle valuations, get court signoff, fend off any appeals, and then let the trustee start distributing funds to former employees who have valid, allowed claims.
