AAAHI Regional Acquisition LLC--Acquisition of Control--First Class Tours, Inc. and Sierra Stage Coaches, Inc. |
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Topics: AAAHI Regional Acquisition, First Class Tours, Sierra Stage Coaches
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Brendetta Jones
Surface Transportation Board
1 November 2019
[Federal Register Volume 84, Number 212 (Friday, November 1, 2019)]
[Notices]
[Pages 58797-58798]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-23901]
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SURFACE TRANSPORTATION BOARD
AAAHI Regional Acquisition LLC--Acquisition of Control--First
Class Tours, Inc. and Sierra Stage Coaches, Inc.
AGENCY: Surface Transportation Board.
ACTION: Notice tentatively approving and authorizing finance
transaction.
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SUMMARY: On October 4, 2019, AAAHI Regional Acquisition LLC (ARA), a
motor carrier, filed an application to acquire control of two
interstate passenger motor carriers, First Class Tours, Inc. (First
Class), and Sierra Stage Coaches, Inc. (Sierra), from their owners,
Reta Jean (Jean) Rogers, Jeffrey Scott (Jeff) Rogers, and Gregory Bryan
(Greg) Rogers (collectively, Sellers). 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.
DATES: Comments may be filed by December 16, 2019. ARA may file a reply
by December 31, 2019. If no opposing comments are filed by December 16,
2019, this notice shall be effective on December 17, 2019.
ADDRESSES: Comments may be filed with the Board either via e-filing or
in writing addressed to: Surface Transportation Board, Attn: Docket No.
MCF 21087, 395 E Street SW, Washington, DC 20423-0001. In addition,
send one copy of comments to: Andrew K. Light, Scopelitis, Garvin,
Light, Hanson & Feary, P.C., 10 W Market Street, Suite 1400,
Indianapolis, IN 46204.
FOR FURTHER INFORMATION CONTACT: Jonathon Binet at (202) 245-0368.
Assistance for the hearing impaired is available through the Federal
Relay Service at (800) 877-8339.
SUPPLEMENTARY INFORMATION: According to the application, ARA is a motor
carrier organized under Delaware law and headquartered in Lakewood,
Colo. (Appl. 2.) ARA represents that it obtained interstate operating
authority on July 31, 2018, but has not yet conducted either interstate
or intrastate operations, and that it does not have a U.S. Department
of Transportation (USDOT) Safety Rating. (Id.) \1\
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\1\ According to ARA, it holds interstate operating authority
from the Federal Motor Carrier Safety Administration (FMCSA) under
FMCSA Docket No. MC-98597 and has been assigned USDOT Number
3140195. (Appl. 2.)
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ARA states that it is indirectly controlled by Tensile Capital GP
LLC (Tensile), a Delaware limited liability company and noncarrier.\2\
(Id.) ARA states that, in addition to ARA, Tensile indirectly controls
the following passenger motor carriers that hold interstate carrier
authority (collectively, ARA Affiliated Carriers) (id. at 2-4): \3\
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\2\ The application states that ARA is wholly owned by All
Aboard America! Holdings, Inc., which in turn is wholly owned by
AAAHI Acquisition Corporation. (Appl. 2.) The application further
states that AAAHI Acquisition Corporation is wholly owned by AAAHI
Intermediate Holdings LLC, which is wholly owned by AAAHI TopCo
Corporation, and AAAHI TopCo Corporation is wholly owned by AAAHI
Holdings LLC. (Id.) According to the application, each of these
entities is a noncarrier holding company. (Id.) 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. (Id.) According to ARA, none of these
companies has motor carrier authority, a USDOT Number, or a USDOT
Safety Rating. (Id.)
\3\ Additional information about these motor carriers, including
USDOT numbers, motor carrier numbers, and USDOT safety ratings, can
be found in the application. (See Appl. 3-4 & Sched. A.)
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Ace Express Coaches, LLC, which provides regional charter,
contract, and casino passenger charter services in Colorado and
surrounding areas;
Hotard Coaches, Inc., which provides local and regional
passenger charter services primarily within Louisiana and Mississippi;
Industrial Bus Lines, Inc., d/b/a All Aboard America,
which provides local and regional passenger charter services generally
in the states of Arizona, New Mexico, and Texas;
Lux Bus America Co., which provides local and regional
passenger charter services primarily in California and Nevada;
Sureride Charter Inc., d/b/a Sun Diego Charter Company and
Sun Express Charter Co., which provides local and regional passenger
charter, tour, and contract shuttle services in south California and
surrounding areas; and
McClintock Enterprises Inc., d/b/a Goldfield Stage & Co.,
which formerly provided local and regional passenger charter, tour, and
contract shuttle services in south California and surrounding areas but
is currently inactive.
The application states that First Class is a Texas corporation that
provides interstate charter service between Texas and points throughout
the United States, Texas intrastate charter service, and intrastate
weekday park-and-ride commuter services between The Woodlands, Tex.,
and points in Houston, Tex. (Id. at 6.) The application further states
that First Class has full-service maintenance facilities and two
terminals in Houston that are used primarily in the operation of daily
and overnight individual passenger roundtrips to and from casinos in
Louisiana for pre-formed charter groups. (Id.) First Class holds
interstate operating authority under FMCSA Docket No. MC-346969, it has
a ``Satisfactory'' USDOT Safety Rating, and its USDOT number is 774995.
(Id.) According to the application, First Class uses approximately 66
vehicles and 99 drivers in providing its services. (Id.) \4\
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\4\ Additional information about First Class, including
information about operations pursuant to state and tribal authority,
can be found in the application. (See Appl. 6.)
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The application states that Sierra is a Texas corporation that
provides interstate and intrastate passenger group charter motor coach
and shuttle services in the Houston area and throughout the United
States, as well as weekday park-and-ride commuter services between The
Woodlands and points in Houston, and that Sierra often operates under
subcontract with First Class. (Id. at 7, 10-11.) Sierra holds
interstate operating authority under FMCSA Docket No. MC-166321, it has
a ``Satisfactory'' USDOT Safety Rating, and its USDOT number is 229351.
(Id. at 7.) According to the application, Sierra uses approximately 27
vehicles and 25 drivers in providing its services. (Id.) \5\
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\5\ Additional information about Sierra, including information
about operations pursuant to state authority, can be found in the
application. (See Appl. 7.)
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[[Page 58798]]
The application states that the Sellers collectively own all equity
interests in First Class and that Greg Rogers has a 100% equity
ownership interest in Sierra. (Id. at 5.) The application further
states that Jean Rogers and Jeff Rogers have no direct or indirect
ownership interests in any interstate passenger motor carrier other
than First Class and that Greg Rogers has no direct or indirect
ownership interest in any interstate passenger motor carriers other
than First Class and Sierra. (Id.)
ARA represents that, through this transaction, it will acquire
direct control of the interstate and intrastate passenger motor carrier
assets and operations of First Class and Sierra. (Id. at 1; see also
id. at 7.) \6\
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\6\ ARA also states that, as part of the proposed transaction,
it will acquire the rolling stock assets of RJR Leasing LLC (RJR),
which owns and leases vehicles to First Class and Sierra and is
headquartered in Houston. According to the application, RJR, which
is collectively owned by Jean Rogers and the Estate of Lanny Gerald
Rogers, does not operate any motor coach or other ground
transportation service. (App. 1, 7.) Because RJR does not engage in
interstate transportation, RJR is not subject to the Board's
jurisdiction, see 49 U.S.C. 13501, and the acquisition of RJR is not
subject to the Board's acquisition authority, see 49 U.S.C. 14303.
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Under 49 U.S.C. 4303(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. ARA 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), 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 ARA
Affiliated Carriers, First Class, and Sierra exceeded $2 million during
the 12-month period immediately preceding the filing of the
application, see 49 CFR 1182.2(a)(5).
ARA asserts that the proposed transaction is not expected to have a
material, detrimental impact on the adequacy of transportation services
available to the public. (Appl. 8.) ARA states that it anticipates that
services to the public will be improved by using the business and
financial management skills of Tensile, as well as its capital, to
enhance and make operations more efficient for First Class and Sierra
in their respective marketplaces, thereby ensuring the continued
availability of adequate transportation service for the public. (Id. at
8, 11.) ARA further states that the continued use of the assets and
work force of the Sellers will help maintain a strong competitive bus
presence in the eastern Texas area; that the proposed transaction
includes the right to use the ``First Class'' and ``Sierra'' names
post-closing; and that due to these strong brand names, ARA may also
seek approval from the FMCSA to change its name to more closely
resemble First Class and/or Sierra. (Id. at 8-9.)
ARA claims that neither competition nor the public interest will be
adversely affected by the proposed transaction. (Id. at 9-11.) ARA
asserts that competition is keen in the markets in which First Class
operates (i.e., passenger group charter motor coach and shuttle
services in the Houston area, including charter transportation between
Houston and various Louisiana casinos, and weekday park-and-ride
commuter services between The Woodlands and points in Houston). (Id. at
10.) Specifically, ARA states that the competition in the charter and
shuttle services marketplaces consists of a large number of
competitors, ranging from small charter operators to very large
corporate charter organizations. ARA also states that special licensing
is required to provide direct service to casinos located in Louisiana,
and that at least two other carriers operating from within the Houston
area have these special permits.\7\ (Id.) According to ARA, the
marketplace of Sierra, like First Class, is primarily passenger group
charter motor coach and shuttle services in the Houston area. ARA
explains that in many instances, Sierra's marketplace is nearly
identical to the marketplace of First Class because Sierra often
operates under subcontract with First Class, including charter
transportation between Houston and Louisiana casinos and weekday park-
and-ride commuter services between The Woodlands and Houston. (Id. at
10-11.) Additionally, ARA states that there is little, if any, overlap
of market areas served by First Class and Sierra with those served the
ARA Affiliated Carriers. (Id. at 11.)
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\7\ ARA also notes that the distance between Houston and these
casinos is short enough that people may elect to drive themselves
rather than use a bus service. (Appl. 10.)
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ARA states that there are no significant fixed charges associated
with the proposed transaction. (Id. at 9.) Regarding the interests of
employees, ARA claims that the transaction will not have a material
impact on employees or labor conditions, nor does ARA anticipate a
measurable reduction in force or changes in compensation levels or
benefits. (Id.) ARA states, however, that staffing redundancies could
result in limited downsizing of back-office or managerial-level
personnel. (Id.)
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 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 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 17, 2019, unless opposing
comments are filed by December 16, 2019.
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 28, 2019.
By the Board, Board Members Begeman, Fuchs, and Oberman.
Brendetta Jones,
Clearance Clerk.
[FR Doc. 2019-23901 Filed 10-31-19; 8:45 am]
BILLING CODE 4915-01-P