[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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    <bullet> 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);
    <bullet> 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
    <bullet> 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:
    <bullet> Coach Leasing, Inc., an Illinois corporation headquartered 
in Chicago, Ill., (id. at 10);
    <bullet> CAM Leasing, LLC, a Delaware corporation headquartered in 
Paramus, N.J., (id. at 11); and
    <bullet> 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