Avalon Motor Coaches, LLC--Acquisition of Control--Wynne Transportation, LLC Publication: Federal Register Agency: Surface Transportation Board Byline: Aretha Laws-Byrum Date: 22 February 2023 Subjects: American Government , Buses Topics: Avalon Motor Coaches, Wynne Transportation

[Federal Register Volume 88, Number 35 (Wednesday, February 22, 2023)]
[Notices]
[Pages 10958-10960]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-03666]


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SURFACE TRANSPORTATION BOARD

[Docket No. MCF 21105]


Avalon Motor Coaches, LLC--Acquisition of Control--Wynne 
Transportation, LLC

AGENCY: Surface Transportation Board.

ACTION: Notice tentatively approving and authorizing finance 
transaction.

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SUMMARY: On January 23, 2023, Avalon Motor Coaches, LLC (Avalon), an 
interstate passenger motor carrier, filed an application for Avalon to 
purchase and assume substantially all the shuttle services of another 
interstate passenger motor carrier, Wynne Transportation, LLC (Wynne). 
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 April 10, 2023. If any comments are 
filed, Avalon may file a reply by April 23, 2023. If no opposing 
comments are filed by April 10, 2023, this notice shall be effective on 
April 11, 2023.

ADDRESSES: Comments may be filed with the Board either via e-filing on 
the Board's website at www.stb.gov/proceedings-actions/e-filing/other-filings/ or in writing addressed to: Surface Transportation Board, 395 
E Street SW, Washington, DC 20423-0001. Comments must reference Docket 
No. MCF 21105.\1\ In addition, one copy of comments must be sent to 
Avalon's representative: Barry M. Weisz, Thompson Coburn LLP, 10100 
Santa Monica Boulevard, Suite 500, Los Angeles, CA 90067.
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    \1\ Concurrent with its application, Avalon also filed, in 
Docket No. MCF 21105 TA, a request under 49 U.S.C. 14303(i) to 
operate the assets to be acquired on an interim basis pending 
approval of the acquisition. The Board granted that request in a 
decision served in that docket on January 30, 2023.

FOR FURTHER INFORMATION CONTACT: Jonathon Binet at (202) 245-0368. If 
you require an accommodation under the Americans with Disabilities Act, 
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please call (202) 245-0245.

SUPPLEMENTARY INFORMATION: According to the application, Avalon is a 
Texas company owned by Virgin-Fish, Inc. (Virgin-Fish), a privately 
held California company.\2\ (Appl. 4.) Virgin-Fish also owns Avalon 
Transportation, LLC (Avalon Transportation), a California company and 
Avalon's sister company. (Id.) Avalon and Avalon Transportation both 
hold interstate authority to carry passengers.\3\ (Id. at 2.) According 
to the application, Avalon and Avalon Transportation currently operate 
chauffeured service offices in California, New York, New Jersey, and 
Pennsylvania, and motor coach offices in California, Arizona, and 
Texas. (Id. at 4.) The application states that Avalon focuses on the 
Texas Motor Coach division and operates charter shuttle services in San 
Antonio, Texas; Beaumont, Texas; and Houston, Texas, while Avalon 
Transportation focuses on chauffeured services and the California

[[Page 10959]]

Motor Coach division.\4\ (Id. at 3-4, 9-10.) The application further 
states that Avalon Transportation provides additional services to its 
clients in over 550 locations through its affiliate program. (Id. at 
4.)
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    \2\ More information about Avalon's corporate structure and 
ownership can be found in the application. (See Appl. 4-5.)
    \3\ Further information about Avalon and Avalon Transportation, 
including U.S. Department of Transportation (USDOT) numbers, motor 
carrier numbers, and USDOT safety fitness ratings, can be found in 
the application. (Appl. 2, 12.)
    \4\ The application states that Avalon also currently operates 
shuttle services in other states, including California and Arizona. 
(Id. at 3.)
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    The application explains that in this transaction, Avalon will 
purchase most of Wynne's assets via an asset purchase agreement and 
will assume substantially all of Wynne's outstanding contracts related 
to charter services. (Appl. 3.) According to the application, Wynne is 
a Texas charter bus operator headquartered in Irving, Texas, with a 
satellite office in Houston, Texas.\5\ (Id. at 10.) The application 
states that Wynne provides transportation services to a variety of 
clients, including corporations, sports teams, and schools, as well as 
transportation for conventions and large events in the Dallas and 
Houston areas. (Id. at 6.) The application states that Wynne is owned 
by Wynne Transportation Holdings, LLC (Wynne Holdings).\6\ (Id. at 5-
6.) The application further states that Wynne Holdings also owns three 
crew change operations that hold interstate authority to carry 
passengers: \7\
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    \5\ Further information about Wynne, including its USDOT number, 
motor carrier number, and USDOT safety fitness rating, can be found 
in the application. (Id. at 2, 12.)
    \6\ More information about Wynne's corporate structure and 
ownership can be found in the application. (See id. at 5-6.)
    \7\ Further information about these motor carriers, including 
USDOT numbers, motor carrier numbers, and USDOT safety fitness 
ratings, can be found in the application. (Id. at 2, 12.)
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     Coastal Crew Change Company, LLC, headquartered in Lake 
Charles, Louisiana, covers a geographical territory that includes 
Louisiana, Mississippi, Alabama, and Florida, and currently operates 
from Lake Charles, Louisiana, and Gray, Louisiana, (id. at 5);
     WTH Commercial Services, LLC d/b/a Mountain Crew Change, 
headquartered in Elko, Nevada, covers a geographical territory that 
includes Nevada, Idaho, Montana, Wyoming, and Colorado, and currently 
operates industrial shuttles within northern and central Utah, (id.); 
and
     Southwest Crew Change Company, LLC, headquartered in 
Dallas, Texas, covers a geographical territory that includes Texas, New 
Mexico, and Arizona, and currently also operates emergency services 
transportation in the state of Texas. (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. Avalon has submitted 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). (See Appl. 6-11.)
    Avalon asserts that the proposed transaction is not expected to 
have an adverse impact on the adequacy of transportation services 
available to the public. (Appl. 7-8.) Avalon states that Wynne, 
currently one of the top three charter service providers in the Dallas-
Fort Worth area, may need to shut down some or all of its operations 
absent the proposed transaction. (Id. at 8.) Avalon explains that 
because Avalon will assume Wynne's existing charter service contracts, 
the proposed transaction will preserve the transportation options that 
Wynne currently provides. (Id. at 7-8.) Avalon states that it intends 
to improve the safety, comfort, and reliability of the existing 
transportation offerings by modernizing Wynne's fleet. (Id. at 8.) 
Avalon also states that the transaction will allow it to improve 
Wynne's operational efficiency and expand Wynne's existing service 
offerings by connecting Wynne's routes and resources to Avalon's. (Id. 
at 7.)
    Avalon argues that the proposed transaction will not adversely 
affect competition within the charter bus markets where Avalon and 
Wynne presently operate. (Id. at 9-11.) Avalon explains that after the 
transaction, Avalon will operate Wynne's fleets in the Dallas and 
Houston markets. (Id. at 10-11.) Avalon states that Wynne and Avalon 
currently operate in different metropolitan areas, except for a small 
overlap in the Houston market, where Avalon currently operates two 
motor coaches and Wynne operates 10 motor coaches. (Id. at 9-10.) 
Avalon estimates that Wynne's current operations constitute only a 
small fraction of the market in each city where Wynne operates. (Id. at 
10.) Avalon states that after this transaction, it does not intend to 
divert any services formerly provided by Wynne to the cities where 
Avalon currently operates or reduce Avalon's services in any of those 
cities. (Id.) However, Avalon asserts that the transaction will allow 
Avalon to take advantage of previously unavailable economies of scale, 
allowing Avalon to offer a more diverse set of services and routes. 
(Id. at 11.) Avalon also believes that the transaction will have an 
overall positive effect on competition in the Dallas market because it 
will prevent Wynne from exiting that market. (Id.) Avalon argues that 
in the Houston market, the transaction's effect on competition will be 
minimal because Wynne and Avalon operate only a small number of motor 
coaches and face vigorous competition from several other charter 
services, as well as public transportation and private car 
transportation. (Id. at 10.)
    Avalon concedes that this transaction may result in additional 
fixed costs in the form of increased interest charges but asserts that 
any such increase is not likely to impact the public. (Id. at 8.) 
Avalon states that additional fixed costs may result because its 
acquisition of Wynne will be financed by a combination of cash and term 
notes, and Avalon will also assume Wynne's existing debt as part of the 
transaction. (Id.) However, Avalon plans to refinance this debt to 
improve the terms of the loans. (Id.) Avalon further represents that 
the proposed transaction will not adversely impact the interests of 
Wynne's employees. (Id. at 8-9.) Avalon states that absent the proposed 
transaction, Wynne may need to reduce its workforce or shut down 
operations entirely. (Id. at 9.) Avalon claims that it is committed to 
maintaining Wynne's current workforce on the same terms and ultimately 
expects to increase Wynne's workforce as it expands Wynne's operations. 
(Id. at 8.) Avalon argues that because it intends to grow the business, 
it has every incentive both to retain Wynne's current employees and 
attract new ones. (Id. at 8-9.)
    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 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).

[[Page 10960]]

    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 April 11, 2023, unless opposing 
comments are filed by April 10, 2023. If any comments are filed, Avalon 
may file a reply by April 23, 2023.
    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: February 16, 2023.

    By the Board, Board Members Fuchs, Hedlund, Oberman, Primus, and 
Schultz.
Aretha Laws-Byrum,
Clearance Clerk.
[FR Doc. 2023-03666 Filed 2-21-23; 8:45 am]
BILLING CODE 4915-01-P