[Federal Register Volume 63, Number 137 (Friday, July 17, 1998)]
[Notices]
[Pages 38689-38691]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-19128]


-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board
[STB Docket No. MC-F-20924]


Global Passenger Services, L.L.C.--Control--Bortner Bus Company, 
et al.

AGENCY: Surface Transportation Board.

ACTION: Notice tentatively approving finance transactions.

-----------------------------------------------------------------------

SUMMARY: Global Passenger Services, L.L.C. (Global or applicant), a 
noncarrier, filed an application under 49 U.S.C. 14303 to acquire 
control of 20 motor passenger carriers, consisting of 15 existing 
subsidiaries--Bortner Bus Company (Bortner), C&D Transportation, Inc. 
(C&D), Comet Bus Lines Corporation (Comet), Connolly's Limousine 
Service, Inc. (Connolly's), Country & Western Tours, Inc. (C&W Tours), 
Franciscan Lines, Inc. (Franciscan), George Ku, Inc. (George Ku), 
Golden Touch Transportation, Inc. (GTT), Golden Touch Limousine of 
Florida, Inc. (GTT of FL), JJ Kelly Charter Bus Service Co. (JJ Kelly), 
The Palmeri Motor Coach Corporation (Palmeri), PROTRAV Services, Inc., 
d/b/a PROTRAV Charter Coach Services (PROTRAV Charter), PROTRAV 
Services, Inc. (PROTRAV Services), Santa Barbara Transportation 
Corporation (SBTC), and Tiger Air Express, Inc. (Tiger)--and 5 new 
target companies, Hemphill Brothers Coach Co., Inc. (Hemphill), 
Hansruedi and Marcia Muggli, d/b/a The Transportation Company (TTC), 
Pacific Explorer Lines, Inc. (Pacific), Stardust Executive 
Transportation, Inc. (Stardust), and Sunnyland Acquisition Corp. 
(SAC).<SUP>1</SUP> Persons wishing to oppose the application must 
follow the rules under 49 CFR part 1182, subpart B. The Board has 
tentatively approved the transaction, and, if no opposing comments are 
timely filed, this notice will be the final Board action.
---------------------------------------------------------------------------

    \1\ Global incorporated SAC, a noncarrier, to acquire the assets 
of Sunnyland Stages, Inc. (SSI), a Missouri corporation and motor 
passenger carrier.
---------------------------------------------------------------------------

DATES: Comments are due by August 31, 1998. Applicant may reply by 
September 21, 1998. If no comments are received by August 31, 1998, 
this notice is effective on that date.

ADDRESSES: Send an original and 10 copies of comments referring to STB 
Docket No. MC-F-20924 to: Surface Transportation Board, Office of the 
Secretary, Case Control Unit, 1925 K Street, N.W., Washington, DC 
20423-0001. In addition, send one copy of comments to applicant's 
representative: Mark J. Andrews, Barnes & Thornburg, 1401 Eye Street, 
N.W., Suite 500, Washington, DC 20005.

FOR FURTHER INFORMATION CONTACT: Beryl Gordon, (202) 565-1600. [TDD for 
the hearing impaired: (202) 565-1695.]

SUPPLEMENTARY INFORMATION: Global, a Delaware limited liability 
company, was created on May 15, 1997. According to Global, it was 
unaware of the requirements of 49 U.S.C. 14303 prior to January 
1998.<SUP>2</SUP> After reviewing its records, Global determined that 
interstate and/or intrastate passenger authority had been issued to 15 
entities out of the 30 corporations that it directly or indirectly 
controls at this time. Upon discovering this unresolved control issue, 
Global filed an application to acquire control, through indirect stock 
ownership, of the existing subsidiaries'Bortner,<SUP>3</SUP> 
C&D,<SUP>4</SUP> Comet,<SUP>5</SUP> Connolly's,<SUP>6</SUP> C&W Tours, 
<SUP>7</SUP> Franciscan, <SUP>8</SUP> George Ku, <SUP>9</SUP> GTT, 
<SUP>10</SUP> GTT of FL, <SUP>11</SUP> JJ Kelly, <SUP>12</SUP> Palmeri, 
<SUP>13</SUP> PROTRAV

[[Page 38690]]

Charter, <SUP>14</SUP> PROTRAV Services, <SUP>15</SUP> SBTC, 
<SUP>16</SUP> and Tiger <SUP>17</SUP> and of the target companies, 
Hemphill, <SUP>18</SUP> TTC, <SUP>19</SUP> Pacific, <SUP>20</SUP> 
Stardust, <SUP>21</SUP> and SAC. <SUP>22</SUP> According to Global, the 
stock of the target companies has been placed in voting trusts pending 
disposition of this proceeding.
---------------------------------------------------------------------------

    \2\ Immediately upon its creation, Global acquired the shares of 
two regulated motor passenger carriers--one with interstate 
authority and one with intrastate authority. Because the initial 
acquisition of the shares of a single interstate carrier did not 
require Board authorization, Global assumed that the subsequent 
stock acquisition of additional interstate carriers required no 
Federal approval.
    \3\ Bortner is a Pennsylvania corporation. It holds federally 
issued operating authority in MC-111191 and intrastate operating 
authority in Ohio and Pennsylvania. Bortner provides charter and 
special operations between points in the United States (including 
Alaska and Hawaii).
    \4\ C&D is a Tennessee corporation. It holds federally issued 
operating authority in MC-191957. C&D provides charter and special 
operations between points in the United States (except Alaska and 
Hawaii).
    \5\ Comet is a Florida corporation. It holds federally issued 
operating authority in MC-231149. Comet provides charter and special 
operations between points in the United States (except Hawaii).
    \6\ Connolly's is a Pennsylvania corporation. It holds federally 
issued operating authority in MC-176826 and intrastate operating 
authority in Pennsylvania. Connolly's provides charter and special 
operations between points in the United States.
    \7\ C&W Tours is a Tennessee corporation. It holds federally 
issued operating authority in MC-263068. C&W provides charter and 
special operations between points in the United States.
    \8\ Franciscan is a California corporation. It holds federally 
issued operating authority in MC-140403 and intrastate operating 
authority in California. Franciscan provides charter and special 
operations between points in the United States (including Alaska, 
but excluding Hawaii).
    \9\ George Ku is a Pennsylvania corporation. It holds federally 
issued operating authority as a common and contract carrier in MC-
31422 and intrastate operating authority in Ohio and Pennsylvania. 
George Ku provides charter and special operations between points in 
the United States (except Hawaii).
    \10\ GTT is a Delaware corporation. It holds federally issued 
operating authority as a contract carrier in MC-235493 and 
intrastate operating authority in Florida.
    \11\ GTT of FL, a wholly owned subsidiary of GTT, is a 
corporation that holds no interstate authority but is licensed by 
Dade County, FL, for intrastate passenger service. The fact that 
these operations appear to be entirely within the State of Florida 
is not determinative of Board jurisdiction. It is well settled that 
service within a single state may be interstate commerce and subject 
to our jurisdiction when there is a through ticket or some other 
arrangement between the involved carriers for through transportation 
to or from a point in another state. Also, if the participants to a 
finance transaction are motor carriers of passengers, subject to 
Board jurisdiction under 49 U.S.C. 13501, then under 49 U.S.C. 
14303(f), they are subject to our exclusive and plenary jurisdiction 
in all matters relating to their consolidation, merger, and 
acquisition of control, and this extends to intrastate operating 
rights. See Colorado Mountain Express, Inc. and Airport Shuttle 
Colorado, Inc., d/b/a Aspen Limousine Service, Inc.--Consolidation 
and Merger-- Colorado Mountain Express, STB Docket No. MC-F-20902 
(STB served Feb. 28, 1997).
    \12\ JJ Kelly is a Florida corporation. It holds federally 
issued operating authority in MC-172787. It provides charter and 
special operations between points in the United States (except 
Alaska and Hawaii).
    \13\ Palmeria is a Pennsylvania corporation. It holds federally 
issued operating authority in MC-167547 and intrastate operating 
authority in New Jersey and Pennsylvania. It provides passenger 
service as a contract carrier between points in Tennessee and 
Kentucky, and charter and special operations between points in the 
United States (except Alaska and Hawaii).
    \14\ PROTRAV Charter is a California corporation. It holds 
federally issued operating authority in MC-227448 and intrastate 
operating authority in California. It provides charter and special 
operations between points in the United States (except Alaska and 
Hawaii).
    \15\ PROTRAV Services, a wholly owned subsidiary of PROTRAV 
Charter, is a corporation that holds no interstate authority but is 
licensed by Nevada for intrastate passenger service. For a 
discussion of the effect of intrastate operating authority, see 
supra note 11.
    \16\ SBTC is a California corporation. It holds federally issued 
operating authority in MC-198757 and intrastate operating authority 
in California. SBTC engages primarily in school transportation 
activities, which are not regulated.
    \17\ Tiger is a Missouri corporation. It holds federally issued 
operating authority as a common and contract carrier in MC-217893 
and intrastate operating authority in Indiana and Missouri. It 
provides passenger service over certain regular routes in Arkansas, 
Missouri, and Oklahoma, and charter and special operations between 
points in the United States (except Alaska and Hawaii).
    \18\ Hemphill is a Tennessee corporation. It holds federally 
issued operating authority in MC-336635. It provides charter and 
special operations between points in the United States.
    \19\ TTC is a California corporation. It holds federally issued 
operating authority in MC-182176 and intrastate operating authority 
in California. It provides charter and special operations, beginning 
and ending at San Francisco and Mateo Counties, CA, and extending to 
points in Oregon, Washington, Nevada, Arizona, Utah, and New Mexico.
    \20\ Pacific is a California corporation. It holds federally 
issued operating authority in MC-251473 and intrastate operating 
authority in California. It provides charter and special operations 
between points in the United States (except Alaska and Hawaii).
    \21\ Stardust is a California corporation. It holds federally 
issued operating authority in MC-304399 and intrastate operating 
authority in California. It provides charter and special operations 
between points in the United States.
    \22\ SAC is a Delaware corporation. It is the transferee of 
SSI's federally issued operating authority in MC-52479 and 
intrastate operating authority in Missouri. It provides passenger 
service over certain regular routes in Arkansas and Missouri, and 
special and charter operations between points in the United States 
(except Hawaii). Because the acquisition of SSI has been structured 
as an asset transaction, Global reports that it has trusteed 
(presumably placed in trust) SAC, which will become a carrier upon 
its acquisition of SSI's assets.
---------------------------------------------------------------------------

    Global submits that the instant transactions have not reduced and 
will not reduce competition in the bus industry or competitive options 
available to the traveling public. It also submits that it has no 
intention of changing the operations of any of the existing 
subsidiaries or target companies as a result of the approvals sought 
here. Global asserts that each of the subsidiaries and target companies 
faces substantial competition from other bus companies and 
transportation modes. It estimates that, at the end of 1997, its 
regular-route, charter and special operations accounted for 
approximately 0.54% of the relevant market for such services in the 
United States. It believes that its control of the target companies 
will increase that market share by only one-tenth of a percentage 
point.
    Global also submits that its control of the subsidiaries and target 
companies has produced and will produce substantial benefits, including 
interest cost savings from restructuring of debt and reduced operating 
costs from Global's enhanced volume purchasing power. Specifically, 
Global claims that the carriers it acquires benefit from the lower 
insurance premiums it has negotiated and from volume discounts for 
equipment and fuel. Global also asserts that it improves the efficiency 
of all acquired carriers, while maintaining responsiveness to local 
conditions, by providing centralized services to support decentralized 
operational and marketing managers. Centralized support services are 
provided in such areas as legal affairs, accounting, purchasing, safety 
management, equipment maintenance, driver training, human resources, 
and environmental compliance. In addition, Global states that it 
facilitates vehicle sharing arrangements between acquired entities, so 
as to ensure maximum utilization and efficient operation of equipment. 
According to Global, the involved transactions offer ongoing benefits 
for employees of acquired carriers not only because of the efficiencies 
described above, but also because Global's policy is to honor all 
collective bargaining agreements of acquired carriers.
    Global certifies that: (1) none of the involved subsidiaries or 
target companies has been assigned a safety rating of less than 
satisfactory by the U.S. Department of Transportation; (2) all involved 
carriers maintain sufficient liability insurance; (3) none of the 
involved carriers has been or is either domiciled in Mexico or owned or 
controlled by persons of that country; and (4) approval of the 
transactions will not significantly affect either the quality of the 
human environment or the conservation of energy resources. Additional 
information may be obtained from applicant's representative.
    Under 49 U.S.C. 14303(b), we must approve and authorize a 
transaction we find consistent with the public interest, taking into 
consideration at least: (1) The effect of the transaction on the 
adequacy of transportation to the public; (2) the total fixed charges 
that result; and (3) the interest of affected carrier employees. The 
prior consummation of the transactions involving the 15 existing 
subsidiaries does not bar approval of the application under section 
14303 if the evidence establishes that the transaction would be 
consistent with the public interest in other respects, and for the 
future.<SUP>23</SUP> Approval is granted in such circumstances when the 
record contains strong affirmative evidence of public benefits to be 
derived from the resulting control, warranting the view that the public 
should not be penalized by being deprived of those benefits. Moreover, 
in this case, the record shows an absence of intent to flout the law or 
of a deliberate or planned violation. See Kenosha Auto Transport 
Corp.--Control, 85 M.C.C. 731, 736 (1960).
---------------------------------------------------------------------------

    \23\ Global seeks nunc pro tunc approval of the control of the 
15 existing subsidiaries that it already controls. While we are 
granting our tentative approval, the need for retroactive effect has 
been demonstrated. Global evidently recognizes that it should have 
sought our approval sooner but, under the circumstances, the Board 
does not intend to pursue enforcement actions against Global for the 
previously unauthorized common control.
---------------------------------------------------------------------------

    On the basis of the application, we find that the proposed 
acquisition of control is consistent with the public interest and 
should be authorized. If opposing comments are timely filed, this 
finding will be deemed vacated and a procedural schedule will be 
adopted to reconsider the application. If no opposing comments are 
filed by the expiration of the comment period, this decision will take 
effect automatically and will be the final Board action.
    This decision will not significantly affect either the quality of 
the human environment or the conservation of energy resources.
    It is ordered:
    1. Global's control of the existing subsidiaries and the target 
companies is approved and authorized, subject to the filing of opposing 
comments.
    2. If timely opposing comments are filed, the findings made in this 
decision will be deemed vacated.
    3. This decision will be effective on August 31, 1998, unless 
timely opposing comments are filed.
    4. A copy of this notice will be served on: (1) the U.S. Department 
of Transportation, Office of Motor Carriers-HIA 30, 400 Virginia 
Avenue, SW, Suite 600, Washington, DC 20024; and (2) the U.S. 
Department of Justice, Antitrust Division, 10th Street & Pennsylvania 
Avenue, N.W., Washington, DC 20530.

    Decided: July 9, 1998.


[[Page 38691]]


    By the Board, Chairman Morgan and Vice Chairman Owen.
Vernon A. Williams,
Secretary.
[FR Doc. 98-19128 Filed 7-16-98; 8:45 am]
BILLING CODE 4915-00-P