Treasury approves $ 700 million loan to company sued for overloading the Pentagon

The Treasury Department on Wednesday approved a $ 700 million loan to YRC Worldwide, a financially troubled trucking company that is also being sued by the Department of Defense (DOD) for overstating shipping costs.

“We are pleased that the Treasury grants this loan in accordance with the CARES Law,” declared the Secretary of the Treasury. Steven MnuchinSteven Terner MnuchinHouse Unanimously Votes to Extend Deadline for Coronavirus Small Business Loan Program Coronavirus Report: The Hill’s Steve Clemons interviews Mark Penn he said in a statement. “This loan will allow a critical provider from the Department of Defense to maintain meaningful employment while providing adequate compensation to taxpayers.”

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The government loan comes when the company has experienced competitive problems in the past five years, and YRC shares fell nearly 30 percent this year. It was only worth $ 70 million at the end of Tuesday, CNN reported.

In a statement, the Treasury described YRC as a “leading provider of critical military transportation and other transportation services to the United States government and provides 68% of non-truckload services to the Defense Department” .

Under the loan agreement, the government will now hold approximately 30 percent of YRC’s shares, and the loans will mature in September 2024.

The DOD sued the company in December 2018, alleging that it overcharged the government for the movement of its shipments, according to the network.

The DOD complaint states that YRC “reweighed thousands of shipments and suppressed the results each time they indicated that one shipment was actually lighter than its original estimated weight.” The complaint alleges that this happened for seven years, costing the agency millions of dollars.

YRC told CNN that it is “a contractual dispute that originated in 2009 and predates the current board of directors and CEO by more than a decade.”

“A motion for dismissal has been pending for 10 months,” added YRC. “There has been no impact on the Defense Department relationship.”