In a surprising turn of events, a federal bankruptcy judge in Delaware admitted an error in a previous ruling on Yellow Corp’s pension claims. The company, which filed for bankruptcy in August 2023, was initially told that its shareholders might have to pay out more than expected for pension claims. However, the judge now says he made a mistake in his September opinion.

The judge, Craig Goldblatt, had wrongly stated that Yellow was in default before it filed for bankruptcy. This detail is crucial because it affects how much money is owed and when it should be paid. The judge's initial decision suggested that the company defaulted early, which would mean full payment without discounting.

Goldblatt asked both sides to submit written arguments to clarify the timing of the default. The case might go to trial later to settle this issue.

Yellow’s stock took a big hit after the initial ruling but bounced back after the judge’s admission of error. The stock price jumped 78% during the hearing, though it closed the day up 31%. Before this change, the stock had plummeted almost 90% after the initial ruling.

This situation highlights the importance of accurate timing in financial cases. It also shows how a judge’s decision can significantly impact a company’s stock value.

Yellow's Pension Claims: A Bankruptcy Judge’s Change of Heart

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