[Federal Register Volume 89, Number 202 (Friday, October 18, 2024)]
[Notices]
[Pages 83935-83937]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-24157]
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SURFACE TRANSPORTATION BOARD
[Docket No. MCF 21120]
Avalon Motor Coaches, LLC, and Avalon Transportation, LLC--
Acquisition of Control--Kerrville Bus Company Inc., All West
Coachlines, Inc., American Coach Lines of Atlanta, Inc., Coach Leasing,
Inc., Cam Leasing, LLC, Coach USA, Inc., and Coach USA Administration,
Inc.
AGENCY: Surface Transportation Board.
ACTION: Notice tentatively approving and authorizing finance
transaction.
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SUMMARY: On August 12, 2024, interstate passenger motor carriers Avalon
Transportation, LLC (Avalon Transportation), and Avalon Motor Coaches,
LLC (Avalon Motor Coaches), filed an application for control over
certain assets of the following Coach USA, Inc. (Coach USA)
subsidiaries: Kerrville Bus Company, Inc. (Kerrville); All West
Coachlines, Inc. (All West); American Coach Lines of Atlanta, Inc. (ACL
Atlanta); Coach Leasing, Inc.; CAM Leasing, LLC; and Coach USA
Administration, Inc. (collectively, Coach USA Subsidiaries). On
September 19, 2024, Virgin-Fish, Inc. (Virgin-Fish), and Jeffrey Brush
submitted a filing joining the application. (Avalon Transportation,
Avalon Motor Coaches, Virgin-Fish, and Jeffrey Brush will be
collectively referred to as ``Avalon'' or ``Applicants.'') The Board is
tentatively approving and authorizing this transaction. If no opposing
comments are timely filed, this notice will be the final Board action.
DATES: Comments must be filed by December 2, 2024. If any comments are
filed, Applicants may file a reply by December 17, 2024. If no opposing
comments are filed by December 2, 2024, this notice shall be effective
on December 3, 2024.
ADDRESSES: Comments, referring to Docket No. MCF 21120, may be filed
with the Board either via e-filing on the Board's website or in writing
addressed to: Surface Transportation Board, 395 E Street SW,
Washington, DC 20423-0001. In addition, send one copy of comments to
Avalon's representative: Barry M. Weisz, Thompson Coburn LLP, 10100
Santa Monica Boulevard, Suite 500, Los Angeles, CA 90067.
FOR FURTHER INFORMATION CONTACT: Jonathon Binet at (202) 245-0368. If
you require an accommodation under the Americans with Disabilities Act,
please call (202) 245-0245.
SUPPLEMENTARY INFORMATION: According to the application,\1\ Avalon
Transportation is a California company and Avalon Motor Coaches is a
Texas company. (Appl. 8.) The sole member of both limited liability
companies is Virgin-Fish, a California company owned by a sole
shareholder, Jeffrey Brush.\2\ (Id. at 8.) Avalon Transportation and
Avalon Motor Coaches both hold interstate authority to carry
passengers.\3\ (Id. at 3.) According to the application, Avalon
Transportation and Avalon Motor Coaches operate chauffeured service
offices in California, New York, New Jersey, and Pennsylvania, and
motor coach offices in California, Arizona, and Texas. (Id. at 8.) The
application states that Avalon Motor Coaches focuses on the Texas Motor
Coach division, while Avalon Transportation focuses on chauffeured
services and the California Motor Coach division. (Id. at 8-9.) The
application also states that Avalon Transportation provides service to
clients in over 700 domestic and international locations through its
affiliate program. (Id. at 9.)
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\1\ The application was supplemented on August 20, 2024, and on
September 19, 2024. Therefore, for purposes of determining the
procedural schedule and statutory deadlines, the filing date of the
application is September 19, 2024. See 49 CFR 1182.4(a).
\2\ More information about Avalon's corporate structure and
ownership can be found in the application. (See Appl. 9.)
\3\ Further information, including U.S. Department of
Transportation (USDOT) numbers, motor carrier numbers, and USDOT
safety fitness ratings, can be found in the application. (Id. at 3,
20.)
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The application explains that in this transaction Avalon will
purchase certain assets and good will of the Coach USA Subsidiaries.
(Id. at 4.) \4\ Specifically, Avalon Transportation will acquire ``the
operating assets utilized in the All West Coachlines, Inc. business
segment,'' and Avalon Motor Coaches will acquire ``the operating assets
utilized in the Kerrville Bus Company,
[[Page 83936]]
Inc. and American Coachlines of Atlanta, Inc. business segments.''
(Id.) \5\
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\4\ Concurrent with the application in this docket, Avalon
Transportation and Avalon Motor Coaches filed, in Docket No. MCF
21120 TA, a request under 49 U.S.C. 14303(i) and the Board's
regulations at 49 CFR 1182.7(b) to manage and operate the assets to
be acquired on an interim basis pending approval of the acquisition.
The Board granted that request in a decision served on August 30,
2024.
\5\ The application states that real estate assets of Kerrville
will be purchased by Found Things, LLC, a California company whose
sole manager is Livery Station, LLC, a New York company solely
managed by Jeffrey Brush. (Id. at 4, 8.) Applicants state that Found
Things, LLC, will not operate passenger motor carrier service. (Id.
at 4.)
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According to the application, Coach USA is a noncarrier Delaware
corporation headquartered in New Jersey,\6\ and the passenger motor
carriers it controls provide services in various locations. (Id. at
10.) The regulated Coach USA Subsidiaries are:
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\6\ More information about Coach USA's corporate structure and
ownership can be found in the application. (Id. at 10-11, Ex. 1.)
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Kerrville, a Texas corporation headquartered in San
Antonio, Tex., that provides deluxe motorcoach charters and shuttles,
customized group tour packages, casino trips, and convention
coordinating and planning, (id. at 10-11);
All West, a Texas corporation headquartered in Sacramento,
Cal., that provides charter bus services in California, charter tours
including to Nevada, and thruway bus services under contract, (id.);
and
ACL Atlanta, a Texas corporation headquartered in
Norcross, Ga., that provides charter bus services in Atlanta, Ga., and
the surrounding Southeast, (id.).\7\
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\7\ Further information about these passenger motor carriers,
including their USDOT numbers, motor carrier numbers, and USDOT
safety fitness ratings, can be found in the application. (Id. at 3,
20.)
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The remaining Coach USA Subsidiaries do not hold operating
authority and are described as follows:
Coach Leasing, Inc., an Illinois corporation headquartered
in Chicago, Ill., (id. at 10);
CAM Leasing, LLC, a Delaware corporation headquartered in
Paramus, N.J., (id. at 11); and
Coach USA Administration, Inc., a Nevada corporation
headquartered in Paramus, (id.).
Under 49 U.S.C. 14303(b), the Board must approve and authorize a
transaction that it finds consistent with the public interest, taking
into consideration at least (1) the effect of the proposed transaction
on the adequacy of transportation to the public, (2) the total fixed
charges resulting from the proposed transaction, and (3) the interest
of affected carrier employees. Applicants have submitted the
information required by 49 CFR 1182.2, including information
demonstrating that the proposed transaction is consistent with the
public interest under 49 U.S.C. 14303(b), see 49 CFR 1182.2(a)(7), and
a jurisdictional statement under 49 U.S.C. 14303(g) that the aggregate
gross operating revenues of the involved carriers exceeded $2 million
during the 12-month period immediately preceding the filing of the
application, see 49 CFR 1182.2(a)(5).
Applicants assert that granting the application would be consistent
with the public interest. (Id. at 12.) The application states that
Avalon will maintain and improve the service currently provided by the
Coach USA Subsidiaries. (Id. at 12-13.) According to Applicants, Avalon
will use its experience to increase efficiency by connecting its
services to those of the Coach USA Subsidiaries and by integrating the
subsidiaries' services into Avalon's software platform. (Id. at 13.)
Applicants also state that Avalon will assume the Coach USA
Subsidiaries' charter pricing agreements and continue meeting the
transportation needs of the charter customers, who will likely increase
or improve their transportation options through Avalon's expansion of
services. (Id.) Further, Applicants state that they intend to improve
the safety, comfort, and reliability of transportation options by
purchasing new vehicles. (Id.) Applicants also state that, absent the
proposed transaction, passenger transportation options may decrease
because the Coach USA Subsidiaries may be required to shut down
operations in certain markets. (Id.)
Applicants argue that the proposed transaction will not adversely
affect competition in the markets where All West and ACL Atlanta
operate because Avalon does not own or operate motor carrier services
or routes in those markets. (Id. at 16.) Rather, according to
Applicants, the proposed transaction will have a positive impact on
competition because All West and ACL Atlanta would otherwise shut down
operations in those markets. (Id. at 19.) Avalon's operations overlap
with Kerrville's operations in San Antonio, Houston, and Dallas, Tex.,
but Applicants argue that the proposed transaction will not adversely
impact competition in those markets. (Id. at 16.) Applicants estimate
that Kerrville's current operations constitute only a small fraction of
the market in those cities,\8\ where there is vigorous competition from
several other charter services, as well as from public transportation
and private car transportation. (Id. at 16-17.) Applicants also state
that demand for charter service in Texas is expected to increase. (Id.
at 16.) Further, Applicants assert that the transaction will have an
overall positive effect on competition in the San Antonio and Houston
metropolitan areas because it will prevent Kerrville from exiting those
markets. (Id. at 18.)
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\8\ Applicants estimate that Kerrville operates less than 1% of
the motor coaches in Dallas (one or two buses), approximately 6% of
the motor coaches in Houston (14 buses), and less than 12% of the
motor coaches in San Antonio (23 buses). (Id. at 17 & n.13.)
Applicants estimate that post-transaction the combined operations
will constitute less than 12% of the Houston market and
approximately 21% of the San Antonio market. (Id. at 18 (stating
that there will be no competitive impact in the Dallas metropolitan
area).)
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Applicants concede that this transaction may result in additional
fixed costs in the form of additional interest charges but assert that
any such increase is not likely to impact the public. (Id. at 14.)
Applicants state that additional fixed costs may result because
acquisition of the Coach USA Subsidiaries will be financed through a
combination of cash and term notes, and Avalon will assume the existing
debt of the subsidiaries. (Id. at 13-14.) However, Avalon intends to
refinance the assumed debt to improve the terms of the loans. (Id. at
14.) Applicants further represent that the proposed transaction will
not adversely impact the interests of the Coach USA Subsidiaries'
employees. (Id. at 14-15.) According to the application, Avalon has
agreed to offer employment to no less than 95% of the employees at each
acquired location operated by the Coach USA Subsidiaries, provided that
the employees meet certain eligibility standards. (Id. at 14.) Further,
Avalon intends to extend employment offers with substantially
equivalent salary, benefits, and seniority to nearly all the eligible
employees of the Coach USA Subsidiaries at the acquired locations.
(Id.) Applicants state that absent the proposed transaction all such
employees would likely lose their jobs. (Id. at 15.) Applicants further
state that, although most of the employees it will retain are bus
drivers, Avalon will also extend employment offers to maintenance,
operations, safety, management, and human resource employees of the
Coach USA Subsidiaries. (Id. at 14; see also id. at 18-19.)
Based on Applicants' representations, the Board finds that the
acquisition as proposed in the application is consistent with the
public interest and should be tentatively approved and authorized. If
any opposing comments are timely filed, these findings will be deemed
vacated and, unless a final decision can be made on the record as
developed, a procedural schedule will
[[Page 83937]]
be adopted to reconsider the application. See 49 CFR 1182.6. If no
opposing comments are filed by the expiration of the comment period,
this notice will take effect automatically and will be the final Board
action in this proceeding.
This action is categorically excluded from environmental review
under 49 CFR 1105.6(c).
Board decisions and notices are available at www.stb.gov.
It is ordered:
1. The proposed transaction is approved and authorized, subject to
the filing of opposing comments.
2. If opposing comments are timely filed, the findings made in this
notice will be deemed vacated.
3. This notice will be effective December 3, 2024, unless opposing
comments are filed by December 2, 2024. If any comments are filed,
Applicants may file a reply by December 17, 2024.
4. A copy of this notice will be served on: (1) the U.S. Department
of Transportation, Federal Motor Carrier Safety Administration, 1200
New Jersey Avenue SE, Washington, DC 20590; (2) the U.S. Department of
Justice, Antitrust Division, 10th Street & Pennsylvania Avenue NW,
Washington, DC 20530; and (3) the U.S. Department of Transportation,
Office of the General Counsel, 1200 New Jersey Avenue SE, Washington,
DC 20590.
Decided: October 15, 2024.
By the Board, Board Members Fuchs, Hedlund, Primus, and Schultz.
Kenyatta Clay,
Clearance Clerk.
[FR Doc. 2024-24157 Filed 10-17-24; 8:45 am]
BILLING CODE 4915-01-P