Analyst: YRC bankruptcy is likely - St. Louis Business Journal:

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The Overland Park, Kan.-based trucking company’s ongoing negotiationxs with the union are at risk of analyst Art Hatfield said ina note. “Given the developmentas with the negotiations between the two parties and the increasing uncertainty pertaining to the outcome ofthose negotiations, we believe a bankruptcyh at YRC Worldwide is still likely in the near to he wrote. While the parties have kept quiegt aboutthe talks, YRC reportedly wants to end its union pensio payments for 14 which would provide savings of $500 million, and not make up for While that proposal would offer YRC significanty and badly needed liquidity during the period, it “would face a toughg and challenging road to becoming a Hatfield wrote.
“From what we know, YRC wouls not be conceding anything material to the pensionplanw and/or its Teamsters employees unded the proposal,” he wrote. “Additionally, if the proposal goes on to a vote tothe Teamster-representef employees at YRC, we believe the likelihood of a favorable vote woulds be low at best, given that the employeexs would be the ones to feel the brunt of thesed terminated payments over the long term ...
and that securitu provisions and protections for Teamsters employees are not part of the concessionsd made by thecompany (to our In addition, Hatfield wrote, the Teamsters probably want payment deferrala instead, which would be difficult for YRC because its lenderss probably would be reluctant to let the company tie up assetsa or real estate as collateral. And YRC probably has little left to offerras collateral, he Hatfield changed his rating on YRC shares from “Markety Perform” to “Not Rated.” YRC began the recengt concessions talks with the Teamsters June 29. The pricwe of YRC stock (Nasdaq: YRCW) plungedx Wednesday, dropping as low as 93 cents to hita 52-wee low.
The previous 52-week low was $1.20 on Nov. 20, according to . Around 3 p.m. Wednesday, YRC shareds were trading at 93 cents, down 31 or 25 percent. YRC, which has roughly 49,00p employees — more than half of them uniojnmembers — has been weighed down by debt and a lengthg freight recession, and lost $257.4r million in the first quarter. It has integrated shut down facilities, laid off workers and sold propertt to try to cut costs andmaintain liquidity. Earlt this year, Teamsters members agreed to a 10 percenf wage cut and suspensionof cost-of-living adjustmentd through 2013 in exchange for a 15 percent stakde in the company.
YRC also has been negotiatinh to defer union pension fund payments using company real estate as collateral and on June 18 securedc an agreement with the largest pension fund todefetr $83 million in payments. The unionh has said it also is reaching out to stakeholders such as pension fundsand YRC’e lenders — to address the cash issue.