All Aboard America! Holdings, Inc.--Acquisition of Control--Lux Bus America Co. |
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Topics: All Aboard America!, Lux Bus America
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Tammy Lowery
Surface Transportation Board
21 September 2018
[Federal Register Volume 83, Number 184 (Friday, September 21, 2018)]
[Notices]
[Pages 47958-47960]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-20550]
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SURFACE TRANSPORTATION BOARD
[Docket No. MCF 21082]
All Aboard America! Holdings, Inc.--Acquisition of Control--Lux
Bus America Co.
AGENCY: Surface Transportation Board.
ACTION: Notice Tentatively Approving and Authorizing Finance
Transaction.
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SUMMARY: On August 14, 2018, All Aboard America! Holdings, Inc.
(AAAHI), a noncarrier, filed an application under 49 U.S.C. 14303 for
AAAHI to acquire a 100% equity interest in Lux Bus America Co. (Lux
Bus), an interstate motor carrier of passengers. On August 23, 2018,
AAAHI filed a supplement to its application. The Board is tentatively
approving and authorizing the transaction, and, if no opposing comments
are timely filed, this notice will be the final Board action. Persons
wishing to oppose the application must follow the rules at 49 CFR
1182.5 and 1182.8.
DATES: Comments must be filed by November 5, 2018. The applicant may
file a reply by November 20, 2018. If no opposing comments are filed by
November 5, 2018, this notice shall be effective November 6, 2018.
ADDRESSES: Send an original and 10 copies of any comments referring to
Docket No. MCF 21082 to: Surface Transportation Board, 395 E Street SW,
Washington, DC 20423-0001. In addition, send one copy of comments to
AAAHI's representative: Andrew K. Light, Scopelitis, Garvin, Light,
Hanson, & Feary, P.C., 10 W Market Street, Suite 1400, Indianapolis, IN
46204.
FOR FURTHER INFORMATION CONTACT: Nathaniel Bawcombe (202) 245-0376.
Federal Information Relay Service (FIRS) for the hearing impaired: 1-
800-877-8339.
SUPPLEMENTARY INFORMATION: AAAHI is a Delaware corporation and a
noncarrier. AAAHI is wholly owned by AAAHI Acquisition Corporation, a
corporation and noncarrier, which in turn is wholly owned by AAAHI
Intermediate Holdings LLC, a limited liability company and noncarrier.
AAAHI Intermediate Holdings LLC is wholly owned by AAAHI TopCo
Corporation, a corporation and noncarrier, which is in turn wholly
owned by AAAHI Holdings LLC, a limited liability company and
noncarrier. AAAHI Holdings LLC is controlled by Tensile Capital
Partners Master Fund LP, a limited partnership and noncarrier, which in
turn is controlled by its general partner, Tensile Capital GP LLC, a
limited liability company and noncarrier.
AAAHI controls the following motor carriers of passengers (the
Affiliated Carriers): AAAHI Regional Acquisition Corporation (ARAC);
Ace Express Coaches, LLC (ACE); Hotard Coaches, Inc. (Hotard);
Industrial Bus Lines, Inc. (Industrial); McClintock Enterprises Inc.
(McClintock); and Sureride Charter Inc. (Sureride).
AAAHI provides a description of each of the Affiliated Carriers, as
summarized below:
ARAC is a recently formed motor carrier that has not yet
begun its passenger transportation activities. The USDOT Number
assigned to ARAC is 3140195, but ARAC does not yet have a USDOT Safety
Rating. ARAC holds interstate operating authority from the Federal
Motor Carrier Safety Administration (FMCSA) under MC-098597. As ARAC
has not yet commenced its passenger service operations, it does not
currently utilize any vehicles or drivers.
Ace is an interstate motor carrier providing regional
charter, contract, and casino passenger charter services in the state
of Colorado and surrounding areas. The USDOT Number assigned to Ace is
[[Page 47959]]
2589674, and Ace has a ``Satisfactory'' USDOT Safety Rating. Ace holds
interstate operating authority from FMCSA under MC-908184. In providing
its services, Ace utilizes approximately 80 vehicles and 99 drivers.
Hotard is an interstate motor carrier providing local and
regional passenger charter services primarily within the states of
Louisiana and Mississippi. The USDOT Number assigned to Hotard is
156451, and Hotard has a ``Satisfactory'' USDOT Safety Rating. Hotard
holds interstate operating authority from FMCSA under MC-143881. In
providing its services, Hotard utilizes approximately 295 vehicles and
308 drivers.
Industrial, doing business as All Aboard America, is an
interstate motor carrier providing local and regional passenger charter
services generally in the states of Arizona, New Mexico, and Texas. The
USDOT Number assigned to Industrial is 27402, and Industrial has a
``Satisfactory'' USDOT Safety Rating. Industrial holds interstate
operating authority from FMCSA under MC-133171. In providing its
services, Industrial utilizes approximately 116 vehicles and 140
drivers.
McClintock, doing business as Goldfield Stage & Co., is an
interstate motor carrier providing local and regional passenger
charter, tour, and contract shuttle services in south California and
surrounding areas. The USDOT Number assigned to McClintock is 291979,
and McClintock has a ``Satisfactory'' USDOT Safety Rating. McClintock
holds interstate operating authority from FMCSA under MC-191442. In
providing its services, McClintock utilizes approximately 27 vehicles
and 62 drivers.
Sureride, doing business as Sundiego Charter Co. and
SunExpress Charter Co., is an interstate motor carrier providing local
and regional passenger charter, tour, and contract shuttle services in
south California and surrounding areas. The USDOT Number assigned to
Sureride is 701846, and Sureride has a ``Satisfactory'' USDOT Safety
Rating. Sureride holds interstate operating authority from FMCSA under
MC-324772. In providing its services, Sureride utilizes approximately
104 vehicles and 106 drivers.
AAAHI explains that under the proposed transaction, it would
acquire 100% of the equity interest in Lux Bus. AAAHI states that Lux
Bus is a California corporation that provides interstate and intrastate
passenger group charter motor coach and shuttle services in the Los
Angeles, Cal. and San Francisco, Cal. areas. Lux Bus also provides
daily round trip and one-way individual passenger service from the Los
Angeles area to Las Vegas, Nev., along with individual tour services to
amusement attractions in the greater Los Angeles area. Lux Bus utilizes
terminals and maintenance facilities located in Anaheim, San Jose and
Stockton, Cal. The USDOT Number assigned to Lux Bus is 1125439, and Lux
Bus has a ``Satisfactory'' USDOT Safety Rating. Lux Bus holds
interstate operating authority from FMCSA under MC-459355. For purposes
of its California intrastate operations, Lux Bus operates pursuant to
intrastate authority issued by the California Public Utilities
Commission (CPUC) under Class A Passenger Charter Certificate No. TCP
22650-A. In providing its services, Lux Bus utilizes approximately 160
vehicles and 192 drivers.\1\
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\1\ AAAHI also states that, as part of the proposed transaction,
it will acquire control of Lux Leasing, LLC (Lux Leasing), a
California limited liability company and a motor carrier. However,
as AAAHI explains, Lux Leasing does not provide interstate
transportation and does not have a USDOT number or interstate
operating authority from FMCSA. According to AAAHI, Lux Leasing
operates only in California, providing intrastate transportation
pursuant to authority issued by the CPUC. Because Lux Leasing does
not engage in interstate transportation, Lux Leasing is not subject
to the Board's jurisdiction and the acquisition of Lux Leasing is
not subject to the Board's acquisition authority under 49 U.S.C.
14303. See 49 U.S.C. 14303 (stating that certain ``transactions
involving motor carriers of passengers subject to jurisdiction under
subchapter I of chapter 135 may be carried out only with the
approval of the Board.'' (emphasis added)); 49 U.S.C. 13501 (stating
that the Board has jurisdiction only over motor carriers that
provide interstate transportation).
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All of the equity interests in Lux Bus are held by Matthew Brown
and David Brown. Matthew Brown is an individual resident of the state
of California and citizen of the United States. Matthew Brown does not
have any direct or indirect ownership interest in any other interstate
passenger motor carrier. David Brown is also an individual resident of
the state of California and citizen of the United States. In addition
to his interest in Lux Bus, David Brown has a 50% equity ownership
interest in Expeditors By Lindale, Inc., doing business as Expeditors
(Expeditors). Expeditors is a motor carrier of passengers that
primarily provides equipment and services for disaster support (such as
support for wildland firefighting crews) in California and surrounding
areas. The USDOT Number assigned to Expeditors is 459936, and
Expeditors has a ``Satisfactory'' USDOT Safety Rating. Expeditors holds
interstate carrier operating authority from FMCSA under MC-246949. In
providing its services, Expeditors utilizes approximately 37 vehicles
and 38 drivers. Expeditors is not a party to, nor is it a subject of,
the proposed transaction. Apart from Lux Bus and Expeditors, David
Brown does not have any direct or indirect ownership interest in any
other interstate passenger motor carrier.
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 that result; and (3) the interest of affected carrier
employees. AAAHI has submitted the information required by 49 CFR
1182.2, including information to demonstrate that the proposed
transaction is consistent with the public interest under 49 U.S.C.
14303(b) and a statement that the gross operating revenues of Lux Bus,
AAAHI, and the Affiliated Carriers (which, as described above, are
controlled by AAAHI) exceeded $2 million for the 12-month period
immediately preceding the filing of AAAHI's application. See 49 U.S.C.
14303(g).\2\
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\2\ Parties must certify that the transaction involves carriers
whose aggregate gross operating revenues exceed $2 million, as
required under 49 CFR 1182.2(a)(5).
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AAAHI asserts that the proposed transaction would not have a
material, detrimental impact on the adequacy of transportation services
available for the public. AAAHI explains that it anticipates that
services to the public would be improved because Lux Bus would continue
to operate, but going forward, it would operate as part of AAAHI's
corporate family, an organization thoroughly experienced in passenger
transportation operations. AAAHI further states that it intends to use
its business and financial management skills, as well as its capital,
to increase the efficiencies and enhance the viability of Lux Bus,
thereby ensuring the continued availability of adequate passenger
transportation service for the public. AAAHI also explains that the
same services currently provided by Lux Bus would continue to be
provided under the same name currently used to provide such services.
With respect to fixed charges, AAAHI states that there are no
significant fixed charges associated with the proposed transaction.
Regarding the interests of employees, AAAHI asserts that it intends
to continue the existing operations of Lux Bus and therefore ``does not
anticipate a measurable reduction in force or changes in compensation
levels and/or benefits.'' (AAAHI App. 8.) However,
[[Page 47960]]
AAAHI notes that ``staffing redundancies could potentially result in
limited downsizing of back-office and/or managerial level personnel.''
(Id.)
Finally, AAAHI states that the impact of the proposed transaction
on the regulated motor carrier industry would be minimal and that
neither competition nor the public interest would be adversely
affected. AAAHI cites Board precedent finding that there are low
barriers to entry in the passenger motor carrier industry and that the
industry is characterized by healthy intramodal and intermodal
competition. AAAHI also states that the Board has consistently found
that the acquisition of control of numerous motor carriers by a non-
carrier can result in better overall service without harming
competition. AAAHI goes on to explain that there are a substantial
number of competitors operating in the markets in which Lux Bus
competes (i.e., the markets for charter and shuttle services in the Los
Angeles and San Francisco areas; tour services to amusement attractions
in the Los Angeles area; and daily roundtrip and one-way service
between Los Angeles and Las Vegas). Specifically, AAAHI states that
there are a variety of charter and shuttle service providers where it
operates, ranging from small charter and tour operators to very large
corporate charter operators, and that service between Los Angeles and
Las Vegas is provided by a number of other motor carriers as well as
airlines. AAAHI further states that there is limited, if any, overlap
in service areas or in customer bases among the Affiliated Carriers and
Lux Bus.
On the basis of the application, the Board finds that the proposed
acquisition 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 be adopted to reconsider the application. See 49 CFR
1182.6(c). 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.
This action is categorically excluded from environmental review
under 49 CFR 1105.6(c).
Board decisions and notices are available on our website 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 as having been vacated.
3. This notice will be effective November 6, 2018, unless opposing
comments are filed by November 5, 2018.
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: September 17, 2018.
By the Board, Board Members Begeman and Miller.
Tammy Lowery,
Clearance Clerk.
[FR Doc. 2018-20550 Filed 9-20-18; 8:45 am]
BILLING CODE 4915-01-P