YRC Worldwide Inc., the financially troubled Overland Park, KS, trucking company, completed a pension contribution deferral agreement with the Teamsters Union to defer the payment of $94 million of contributions due last month. In exchange, YRC has pledged real property so that the union has first priority security interest in the property. The real estate is located throughout the United States and Mexico.
YRC Inc., USF Holland Inc., USF Reddaway Inc. and New Penn Motor Express, Inc., made the deal with the Central States, Southeast and Southwest Areas Pension Fund with Wilmington Trust Co., as agent. The Central States Pension Fund is the largest of the Company's International Brotherhood of Teamsters ("IBT") multiemployer defined benefit pension funds, representing approximately 58% of the company's pension funding obligations.
The initial agreement covered $83 million in pension contributions. Since the initial agreement, seven additional union funds have joined as participants in the same agreement for a deferral of an additional $11 million.
If YRC were to default on cash contributions, the union funds would have the right to foreclosure on the pledged properties.
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