Iconic grocery retailer closes, not yet filed for bankruptcy

Distressed businesses often file for Chapter 11 bankruptcy to reorganize their operations and finances under court protection to allow them to continue operating.

When all seems lost and a company can no longer operate, businesses may take it a step further and file Chapter 7 bankruptcy to liquidate and shut down operations.

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In another situation, a company can liquidate its products, cease operations, and close its doors without ever filing for bankruptcy.

Related: Bankrupt pizza chain operator unloads dozens of restaurants

In many cases, you have retailers like LL Flooring or Big Lots, file for Chapter 11 protection, close multiple store locations, and continue to operate.

Then you have businesses like discount retailer 99 Cents Only in April, which filed for Chapter 11 bankruptcy, liquidating its inventory and closing all of its stores.

In the third scenario, Robinson, Illinois-based Midwest Trucking and Logistics, which had a contract with the U.S. Postal Service to transport mail, unexpectedly shut down its business in September with plans to cease operations , according to sources familiar with the situation. But he didn’t file for bankruptcy.

Midwest Transport’s regional managers notified employees by phone late on September 5 that the company was going out of business. The company, which employed more than 480 drivers out of about 650 workers, has not made any statement about the sudden shutdown and has not yet filed for bankruptcy protection.

The company’s website was still working on Oct. 1, but the phone number was not.

Before the company’s name changed to Yelloh, Paul Cussen, a delivery man for Schwan’s, holds a package of ground beef that the company sold. (Photo by Glenn Asakawa/The Denver Post via Getty Images)

Glenn Asakawa/Getty Images

Yelloh is closing operations in November

Finally, iconic frozen food delivery retailer Yelloh, formerly known as Schwan’s, said it would cease all operations in November, citing multiple insurmountable business challenges, including economic and market headwinds and changing style of consumer life. The company has not filed for bankruptcy since October 1.

Related: Struggling retailer closes more stores in Chapter 11 bankruptcy

“It is with a heavy heart that we have made the difficult decision to cease Yelloh operations,” CEO Bernardo Santana said in a Sept. 23 statement. “We are grateful to our many loyal customers and hardworking employees for all they have done to support. US

“I am deeply grateful for the tireless and courageous efforts of our employees, as well as the dedication of our customers. It has been our greatest pleasure and honor to serve our customers their favorite meals and frozen meals,” said Santana.

The Marshall, Minnesota-based frozen food delivery company was founded in 1952 as Schwan’s, delivering frozen foods, meals and ice cream to American homes in its fleet of yellow trucks.

More bankruptcy stories:

• Retail chain Big Lots is poised to file for Chapter 11 bankruptcy
• Manufacturers of popular retail products file for Chapter 11 bankruptcy
• The mattress company’s rival files for Chapter 11 bankruptcy

The company, which grew to the nation’s largest fleet of refrigerated trucks, began to face headwinds over the past 20 years due to changing consumer lifestyles and competitive pressures. The company also began to experience staffing difficulties nationwide and the 2020 Covid-19 pandemic caused severe disruption to the food supply chain.

“Our concern now is for our employees and taking care of them as we all share that this business – which has served millions of families and provided a livelihood for thousands over decades – and- has unfortunately gone through its life cycle,” Yelloh council. member Michael Ziebell said in a statement.

“Digital shopping has replaced the in-person interaction with customers at the door that was the company’s hallmark,” Ziebell said.

Yelloh will cease operations within the next two months, the statement said, and has already issued notices to employees under the Worker Adjustment and Retraining Notification Act. The last day of delivery will be November 8.

The direct-to-consumer frozen food delivery company has about 1,100 workers and delivers products via drop shipping or its yellow freezer trucks. Yelloh has not indicated whether it will file for bankruptcy.

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