Yellow Trucking Company May Be Headed Toward Bankruptcy

“Our administration has been in touch with both parties, but we’re not going to comment on a legal dispute,” Michael Kikukawa, a White House spokesman, said. “The loan in question was provided by the Trump administration.”

Mr. Sanders’s office did not respond to a request for comment. A Treasury Department spokeswoman said that the agency continued to monitor loans made through pandemic recovery programs during the prior administration.

The Treasury Department also holds nearly 30 percent of Yellow’s common stock and the loan is secured by the company’s assets. If Yellow declares bankruptcy and has to liquidate, the U.S. government will take over much of the company’s trucking fleet and real estate holdings.

Yellow’s loan, which was awarded as part of the $2.2 trillion pandemic relief legislation that Congress passed in 2020, had raised questions of cronyism from the beginning.

A report last year produced by Democratic staff of the House Select Subcommittee on the Coronavirus Crisis found that the money had been doled out over the objections of career officials at the Defense Department and suggested that senior Trump administration officials had intervened to ensure that Yellow received special treatment despite concerns about its eligibility to receive relief funds. In addition to deep ties to the Trump administration, the company, which for years faced legal and financial troubles, also had a strong lobbying presence in Washington.