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[Federal Register Volume 90, Number 6 (Friday, January 10, 2025)]
[Notices]
[Pages 2060-2062]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-00392]

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SURFACE TRANSPORTATION BOARD

[Docket No. MCF 21128]

Avalon Motor Coaches, LLC--Acquisition of Control--Rose 
Chauffeured Transportation, Inc.

AGENCY: Surface Transportation Board.

ACTION: Notice tentatively approving and authorizing finance 
transaction.

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SUMMARY: On December 11, 2024, Avalon Motor Coaches, LLC (Avalon Motor 
Coach), an interstate passenger motor carrier, together with its 
noncarrier affiliates Virgin-Fish, Inc. (Virgin-Fish), and Jeffrey 
Brush (Avalon Motor Coach, Virgin-Fish, and Jeffrey Brush will be 
collectively referred to as ``Avalon'') filed an application for Avalon 
to purchase most of the assets of another interstate passenger motor 
carrier, Rose Chauffeured Transportation, Inc. (Rose), and assume 
substantially all of its outstanding contracts related to its charter 
services. 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 February 24, 2025. If any comments are 
filed, Applicants may file a reply by March 11, 2025. If no opposing 
comments are filed by February 24, 2025, this notice shall be effective 
on February 25, 2025.

ADDRESSES: Comments, referring to Docket No. MCF 21128, 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, Avalon Motor 
Coach is a Texas limited liability company.

[[Page 2061]]

(Appl. 3.) The sole member of Avalon Motor Coach is Virgin-Fish, a 
California company owned by a sole shareholder, Jeffrey Brush.\1\ (Id. 
at 3.) Virgin-Fish is also the sole member of Avalon Transportation, 
LLC (Avalon Transportation), a California company and Avalon's sister 
company. (Id. at 3-4.) Avalon Transportation and Avalon Motor Coach 
both hold interstate authority to carry passengers.\2\ (Id. at 2.) 
According to the application, Avalon Motor Coach and Avalon 
Transportation currently operate offices for chauffeured services in 
Los Angeles, New York, San Francisco, New Jersey, and Philadelphia, and 
offices for motor coach services in Sacramento, San Jose, Orange 
County, Phoenix, Dallas, San Antonio, Houston, Beaumont, and Atlanta. 
(Id. at 4.) The application states that Avalon Motor Coach primarily 
focuses on the Texas Motor Coach division and operates charter shuttle 
services in multiple states, including Texas, California, and Arizona, 
while Avalon Transportation focuses on chauffeured services and the 
California Motor Coach division. (Id. at 3-4.) In addition to its major 
offices, Avalon Transportation also provides service to clients in over 
550 domestic locations through its affiliate program. (Id. at 4.)
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    \1\ More information about Avalon's corporate structure and 
ownership can be found in the application. (Appl. 3-4, Ex. A.)
    \2\ 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 2, 
11.)
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    The application explains that, in this transaction, Avalon will 
purchase most of Rose's assets and assume substantially all of the 
outstanding contracts related to Rose's charter services. (Id. at 2-3.) 
\3\ According to the application, Rose is a North Carolina corporation 
headquartered in Charlotte, N.C.\4\ (Id. at 4.) Rose holds interstate 
authority to carry passengers.\5\ (Id.) The application states that 
Rose provides luxury motor coach, mini coach, chauffeured services, and 
general passenger transportation services in Charlotte and surrounding 
areas, and also provides service through partnerships with Visit 
Charlotte and Charter Up. (Id.)
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    \3\ Concurrent with its application, Avalon also filed, in 
Docket No. MCF 21128 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 
January 6, 2025.
    \4\ More information about Rose's corporate structure and 
ownership can be found in the application. (Appl. 4-5.)
    \5\ Further information about Rose, including its USDOT number, 
motor carrier number, and USDOT safety fitness rating, can be found 
in the application. (Id. at 2, 11.)
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    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).
    Avalon asserts that granting the application would be consistent 
with the public interest. (Id. at 6.) The application states that 
Avalon will maintain and improve the service that Rose currently 
provides to the public. (Id.) Avalon states that Rose's current owners 
face health challenges and other concerns that may soon prevent them 
from continuing to operate the business at current service levels, 
resulting in interruptions to the availability of transportation 
services. (Id. at 10.) According to Avalon, prompt approval of the 
transaction will allow Rose's owners to preserve the business and 
accomplish a smooth transition of ownership while they are still 
healthy enough to do so, and thus facilitate the continued availability 
of transportation services to the public. (Id. at 8-9.) Avalon states 
that it will assume charter pricing agreements with Rose's charter 
customers and continue to meet their transportation needs. (Id. at 6.) 
Avalon intends to use its experience providing transportation services 
in multiple markets to increase efficiency, by integrating Rose's 
services into Avalon's software platform and connecting its existing 
services to Rose's services. (Id.) These efforts, according to Avalon, 
will likely increase or improve the transportation options available to 
charter customers. (Id.) Avalon also states that it intends to improve 
the safety, comfort, and reliability of charter customers' 
transportation options by purchasing new vehicles. (Id.)
    Avalon argues that the proposed transaction will not adversely 
affect competition in the markets where Avalon and Rose operate because 
Avalon and Rose do not operate in the same geographic markets. (Id. at 
8-9.) The application states that Avalon's nearest business segment is 
based in Atlanta, Ga., which is located approximately 250 miles from 
Rose in Charlotte, N.C. It asserts that customers in North Carolina 
(where Rose operates) do not use Avalon's Atlanta motor carrier 
services for trips originating in Charlotte, nor do customers in the 
Atlanta market (where Avalon operates) use Rose's motor carrier 
services for trips originating in Atlanta. (Id.) According to Avalon, 
the charter and motor carrier services that Avalon and Rose provide are 
not viable alternatives for each other due to the high added costs 
involved in using a service that originates so far away from the 
customer, and hence there will be no competitive impacts in the markets 
in which Avalon and Rose operate. (Id.)
    Avalon concedes that this transaction may result in additional 
fixed costs in the form of additional interest charges but asserts that 
any such increase is not likely to impact the public. (Id. at 7.) 
Avalon states that additional fixed costs may result because its 
acquisition of Rose will be financed through a combination of cash and 
term notes, and Avalon will assume Rose's existing debt. (Id.) However, 
Avalon intends to refinance the assumed debt to improve the terms of 
the loans. (Id.) Avalon further represents that the proposed 
transaction will not adversely impact the interests of Rose's 
employees. (Id.) The application states that service levels could 
decrease absent the proposed transaction, and providing reduced service 
would require a smaller workforce. (Id.) However, Avalon has committed 
to maintain Rose's current workforce of over 50 employees on the same 
or better terms of employment. (Id.) According to the application, 
Avalon also intends to increase the size of this workforce as part of 
its plan to expand Rose's services and expects to offer increased 
potential opportunities to existing employees as the business grows. 
(Id.) Avalon further states 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. (Id.)
    Based on Avalon's 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 2062]]

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 February 25, 2025, unless opposing 
comments are filed by February 24, 2025. If any comments are filed, 
Applicants may file a reply by March 11, 2025.
    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: January 6, 2025.

    By the Board, Board Members Fuchs, Hedlund, Primus, and Schultz.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2025-00392 Filed 1-8-25; 8:45 am]
BILLING CODE 4915-01-P
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