YRC Freight Canada: vacation pay expected in full, nothing projected for Class 5

YRC Freight Canada Company traces its trucking business to 1952 and the founding of Reimer Express, which began with a route between Winnipeg and Windsor and by 1969 offered service coast to coast. Roadway bought Reimer in 1997, and it came under the Yellow banner when Yellow merged with Roadway in 2009, operating first as YRC Reimer and, from 2019, under the YRC Freight brand. In the summer of 2023 it owned three transportation service centres, two in Ontario and one in Quebec, leased 13 more between British Columbia and Quebec, and employed about 584 people, 222 of them in Ontario and 158 in Manitoba. Its revenue for 2022 was US$89.8 million, about 2% of Yellow's, per the Affidavit of Matthew A. Doheny, Aug. 7, 2023, paras. 20, 44–47, 51–52, sworn by Yellow's chief restructuring officer.

That affidavit attributes Yellow's liquidity crisis "in large part" to the International Brotherhood of Teamsters' blocking of One Yellow, a program meant to let the company compete with non-union carriers. After Yellow deferred about US$22.5 million in contributions to the Central States health and pension funds, the union issued a 72-hour strike notice on July 17, 2023. The strike was cancelled, but Yellow's most loyal customers had dropped it as a carrier: "On the day the strike was announced, Yellow's individual shipments had totaled approximately 40,000. Four days later, Yellow's shipments were nearly zero." Between about July 28 and August 1, all of the unionized employees in Canada were laid off and all but about 65 non-union employees were terminated, per the Affidavit of Matthew A. Doheny, Aug. 7, 2023, paras. 11–13, 53. The Debtors then paid approximately CAD$4 million in statutory termination and severance pay, according to the Ninth Report of the Information Officer, Sept. 11, 2025, para. 7.1.

The accrued vacation pay went unpaid: approximately CAD$2.2 million owed to 461 unionized and non-unionized employees laid off or terminated before the petition date. The final DIP order in Delaware barred paying accrued time off to employees terminated before the filing until the Debtors' secured funded debt had been repaid in cash. The debt was repaid, but in September 2025 the information officer reported there was still "no order of the U.S. Bankruptcy Court affirmatively authorizing payment of amounts to employees," per the Ninth Report of the Information Officer, Sept. 11, 2025, para. 7.2.

On July 1, 2026, Yellow's liquidating Chapter 11 plan took effect, and a liquidating trustee took over the wind-down of the Debtors, the four Canadian companies among them. Former YRC Freight Canada employees holding PTO and commission claims "are expected to recover in full under the Confirmed Plan to the extent such claims are allowed," while holders of general unsecured claims against the Canadian Debtors, trade creditors among them, "are not presently projected to receive distributions," per the Eleventh Report of the Information Officer, July 2, 2026, paras. 4.5, 4.7, 5.19 and the Tenth Report of the Information Officer, Feb. 25, 2026, para. 5.13.

Three terminals and five Reimer leases

Canada's part of the case was a recognition proceeding under Part IV of the CCAA. After the Delaware filings of August 6, 2023, Yellow Corporation, as proposed foreign representative, obtained an interim stay from the Ontario Superior Court of Justice (Commercial List) on August 8; on August 29 the court recognized the Chapter 11 cases as a foreign main proceeding and appointed Alvarez & Marsal Canada Inc. as information officer, per the Eleventh Report of the Information Officer, July 2, 2026, paras. 1.1, 1.3, 1.5. Chief Justice Morawetz's supplemental order ranked an administration charge of up to CDN$700,000 first, a D&O charge of up to CDN$3,500,000 second and the DIP charge third. The directors' indemnity behind the D&O charge extended, "for greater certainty," to liabilities for "wages, vacation pay or termination or severance pay due to employees," per the Supplemental Order (Foreign Main Proceeding), Aug. 29, 2023, paras. 19–21, 25.

The Canadian companies had given secured guarantees of Yellow's prepetition funded debt, approximately US$1.2 billion. Sales of real estate and rolling stock repaid it in full, with approximately US$212.5 million of post-petition DIP financing, within about six months of the petition date, per the Tenth Report of the Information Officer, Feb. 25, 2026, paras. 4.3, 5.16.

In the first round of sales, Royal Group Holdings Inc. agreed to buy the Woodstock, Ontario, terminal at 1187 Welford Place for US$2.95 million and Allstar Investments Inc. the Quebec terminal at 930 Route 147 for US$550,000, each subject to adjustments, per the Fourth Report of the Information Officer, Dec. 15, 2023, paras. 4.16–4.17. Allstar, approved in December 2023, failed to close "despite extensive efforts of the Debtors and their advisors," per the Ninth Report of the Information Officer, Sept. 11, 2025, paras. 4.9–4.11. Woodstock closed on January 23, 2024 for proceeds of approximately US$2.97 million; the Quebec property in Dixville, remarketed, closed on November 6, 2025 at CAD$160,000; and the Whitby terminal at 285 Blair Street, sold to 2534929 Ontario Inc., closed on November 28, 2025 at CAD$21,550,000. The information officer puts YRC Freight Canada's real property realizations at approximately CAD$25.8 million, per the Tenth Report of the Information Officer, Feb. 25, 2026, paras. 4.5, 4.8–4.9, 5.15 and the Information Officer's Certificate, Nov. 28, 2025.

The last five leases, in Alberta, Saskatchewan and Manitoba, were held from Reimer World Properties Corp. and RWP Manitoba Ltd. On March 28, 2025, YRC Freight Canada agreed to end them for a termination fee of CA$9.8 million plus tax, to assign the Manitoba landlord its sublease of the Winnipeg premises, and to transfer "a restored truck and trailer" located there. The information officer understood the fee to be less than the administrative claim the landlords would likely have had on rejection plus maintenance and repair costs that "could be substantial," per the Eighth Report of the Information Officer, Apr. 25, 2025, paras. 4.14–4.16, 6.5, 6.8.

The priority scheme in Delaware

The Woodstock proceeds are held apart: the information officer keeps them in trust, approximately CAD$4,177,000 with interest, and at the later closings found that sum sufficient to cover the Holdback Amount, the aggregate of the administration and D&O charges. Nothing more was held back, and the Whitby and Dixville proceeds "were remitted within the existing cash management system," per the Tenth Report of the Information Officer, Feb. 25, 2026, paras. 4.10–4.11. Under Yellow's cash management order, intercompany transfers are recorded and granted administrative priority over other unsecured claims, per the Ninth Report of the Information Officer, Sept. 11, 2025, para. 5.9.

The Tenth Report lists, among other things, what the Canadian proceeds will pay: administrative lease-rejection claims, the Reimer leases among them; priority employee claims (Class 3) and non-priority employee claims up to US$7,500 per claimant (Class 4A), both to be paid in full in cash; claims of suppliers for goods received in the 20 days before the petition, which carry administrative priority under s. 503(b)(9) of the Bankruptcy Code; and post-petition intercompany administrative claims, "primarily Yellow Corporation," for funding YRC Freight Canada's operations and wind-down, for lease-rejection damages Yellow Corporation paid, and for other intercompany charges. After those, the Debtors "anticipate that no further funds will remain available for distribution to holders of Class 5 General Unsecured Claims," per the Tenth Report of the Information Officer, Feb. 25, 2026, paras. 5.11, 5.18–5.20. The scheduled employee claims against the Canadian Debtors are all expected to recover in full; two claims asserted by former employees, still being reconciled in February, in certain cases exceeded the plan's thresholds by approximately US$200, an excess that would fall into Class 5. More than 92% of voting creditors by value and 90% by number supported the plan, with similar results reported for Class 5 claims against the Canadian Debtors, per the Tenth Report of the Information Officer, Feb. 25, 2026, paras. 5.3, 5.12.