Yellow, PBGC Debate Pension Penalties as Judge Seeks Clarity

The judge overseeing the remains of bankrupt trucker Yellow Corp. said he’s struggling to resolve a legal standoff involving hundreds of millions of dollars between the company’s hedge fund owners and a group of pensions.

US Bankruptcy Judge Craig T. Goldblatt must decide whether a taxpayer bailout of the pensions worth billions of dollars blocks them from getting any money from Yellow. As part of its bankruptcy, Yellow sold all its assets, fired all its employees, and pulled out of several pension plans.

The pension plans argue that under US pension rules, Yellow must pay a penalty for canceling ...