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Academy Express, LLC and Franmar Leasing, LLC--Purchase of Certain Assets of James River Bus Lines Publication: Federal Register Agency: Surface Transportation Board Byline: Eden Besera Date: 21 July 2023 Subjects: American Government  , Buses
Topics: Academy Express, Franmar Leasing, James River Bus Lines |
[Federal Register Volume 88, Number 139 (Friday, July 21, 2023)]
[Notices]
[Pages 47230-47232]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-15531]
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SURFACE TRANSPORTATION BOARD
[Docket No. MCF 21108]
Academy Express, LLC and Franmar Leasing, LLC--Purchase of
Certain Assets of James River Bus Lines
AGENCY: Surface Transportation Board.
ACTION: Notice tentatively approving and authorizing finance
transaction.
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SUMMARY: Academy Express LLC (Express), a motor carrier of passengers;
Franmar Leasing LLC (Franmar), a noncarrier; and James River Bus Lines
(James), a motor carrier of passengers (collectively, Applicants),
filed an application for approval of the sale of certain assets of
James to Express and Franmar. The Board is tentatively approving and
authorizing this transaction. If no opposing comments are timely filed,
this notice will be the final Board action.
[[Page 47231]]
DATES: Comments must be filed by September 5, 2023. If any comments are
filed, Applicants may file a reply by September 19, 2023. If no
opposing comments are filed by September 5, 2023, this notice will be
final on September 6, 2023.
ADDRESSES: Comments may be filed with the Board either via e-filing on
the Board's website or mailing to the Board's offices and must
reference Docket No. MCF 21108. Comments may be e-filed at www.stb.gov/proceedings-actions/e-filing/other-filings/. Mailed comments may be
sent to: Surface Transportation Board, 395 E Street SW, Washington, DC
20423-0001. In addition, one copy of comments must be sent to
Applicants' representative: Joseph J. Ferrara, Ferrara and Associates,
1111 Paterson Ave., Hoboken, NJ 07030.
FOR FURTHER INFORMATION CONTACT: Amanda Gorski at (202) 245-0291. If
you require an accommodation under the Americans with Disabilities Act,
please call (202) 245-0245.
SUPPLEMENTARY INFORMATION: According to the application,\1\ Express and
Franmar \2\ are affiliated entities under the common control of the
Tedesco Family ESBT Trust (the ESBT Trust). (Appl. 1; Suppl. 9, June
21, 2023.) Express is a motor carrier licensed by the Federal Motor
Carrier Safety Administration (FMCSA) that operates interstate charter
and contract motor coach passenger services in states along the East
Coast, primarily in the Northeast, from garage facilities located in
Massachusetts, Rhode Island, Connecticut, New Jersey, Maryland,
Northern Virginia, and North Carolina. (Appl. 7; Suppl. 3, June 21,
2023.) Franmar, a non-carrier, is engaged exclusively in the ownership
and leasing of passenger motor coaches for use by Express and its motor
carrier affiliates, as described below. (Appl. 5.) James is a family-
owned motor carrier engaged in passenger transportation services in and
from Virginia from customer bases centered in the Richmond and Norfolk
areas. (Appl. 1, 7; Suppl. 4, June 21, 2023.) \3\
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\1\ The application was filed on May 9, 2023. By decision served
June 8, 2023, Applicants were directed to file certain supplemental
information. Applicants filed the supplement on June 21, 2023.
Therefore, for purposes of determining the procedural schedule and
statutory deadlines, the filing date of the application is June 21,
2023. See 49 CFR 1182.4(a). On July 11, 2023, Applicants submitted a
second supplement clarifying various points in their June 21, 2023
supplement.
\2\ The application refers to this party as both ``Franmar
Leasing LLC'' and ``Franmar Leasing, Inc.'' (See Appl. 5-6.)
\3\ Further information about James--including its U.S.
Department of Transportation (USDOT) number, motor carrier number,
and USDOT safety fitness rating--can be found in the application and
the supplement. (See Appl. 6-7, 9; Suppl. 2-3, 6, June 21, 2023; see
also Second Suppl., July 11, 2023 (clarifying information relating
to James' interstate motor coach passenger operations).)
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Applicants state that the ESBT Trust owns and controls three FMCSA
carriers--Express, Academy Lines LLC (Lines), and Airport Express LLC
(Airport)--along with Franmar and several other non-carrier companies.
(Suppl. 8, June 21, 2023.) According to Applicants, Francis and Mark
Tedesco (the Tedescos) are the lifetime beneficiaries of the ESBT Trust
as well as a second trust--the Academy (Florida) ESB Trust (the Florida
Trust)--that owns and controls a fourth FMCSA carrier, Academy Bus LLC
(FL) (Bus FL). (Id. at 8, 10.) \4\ Applicants explain that through
these respective trusts, the Tedescos exercise ownership and control of
the carriers and affiliated non-carriers identified in their filings.
(Id. at 8-11.)
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\4\ Further information about the motor carriers controlled by
the Tedescos--including their USDOT numbers, motor carrier numbers,
and USDOT safety fitness ratings--can be found in the application
and the supplement. (See Appl. 4-5, 7, 9; Suppl. 3-4, 7, 9-11, June
21, 2023.) According to Applicants, Lines operates interstate
passenger commuter service and charter passenger service primarily
in New York and New Jersey; Airport does not currently conduct any
motor coach or transportation services but previously operated in
New Jersey; and Bus (FL) operates interstate charter and contract
motor coach passenger service primarily in North Carolina, South
Carolina, Georgia, and Florida. (See Appl. 5, 7; Suppl. 10-11, June
21, 2023.) The operations of Express are described above.
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James proposes to sell assets used in its motor coach passenger
transportation business pursuant to an asset purchase agreement dated
April 23, 2023. (Appl. 1, Ex. C.) According to Applicants, this
transaction is a result of a business decision by James to permanently
withdraw from the motor coach transportation business so that its
principal can focus on transportation consulting activities. (Appl. 1-
2.) \5\ The application states that, under the terms of the agreement,
Franmar will acquire the motor carrier assets of James (consisting of
28 motor coaches and 17 mini-motor coaches) and Express will acquire
the non-motor carrier assets of James (consisting of customer lists,
telephone numbers, website and related software, pending charter
customer contracts and associated deposits, parts, equipment, supplies,
and intangibles used by James in its charter business operation). (Id.
at 2.)
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\5\ (See also Appl. 6-7; Suppl. 6, 8, June 21, 2023 (explaining
that James will surrender its operating certificates and cease
operations as a motor coach passenger transportation carrier).)
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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 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 annual operating revenues of the involved carriers exceed $2
million, see 49 CFR 1182.2(a)(5). (See Appl. 7-9; Suppl. 2-9, 11, June
21, 2023.)
Applicants assert that the proposed transaction is in the public
interest because James is permanently withdrawing from the motor coach
passenger transportation business and would sell its motor coach
vehicles and related assets, which it no longer desires to operate, to
Franmar and Express for continued use in the delivery of passenger
motor coach transportation services. (Appl. 8.) No operable motor
vehicles would be scrapped, and no new busses would need to be
purchased by Franmar at this time, conserving metals and energy
resources. (Id.) Applicants represent that the public would not lose
service because the same number of buses will continue to operate.
(Id.) Applicants also state that the transaction would promote
efficiencies, competitive pricing, and exemplary service. (Id. at 8-9;
see also id. at 3 (stating that the transaction would increase
operating efficiencies, reduce operating costs, and promote greater
economic use of existing transportation capital resources, maintaining
service options to customers of both James and Express).) Applicants
also assert that the proposed transaction would not result in an
increase to fixed charges, as the proposed transaction is expected to
be for cash. (Id. at 8.)
Additionally, Applicants assert that the proposed transaction would
not adversely affect qualified employees at the locations from which
James operates. (Id. at 9.) Applicants state that Express will
interview and offer employment opportunities to those employees, which
Applicants claim is ``a necessity to permit Express to continue to
operate the assets acquired as a carrier.'' (Id.)
According to Applicants, the proposed transaction would not
adversely affect competition or the
[[Page 47232]]
adequacy of transportation offerings. Applicants state that Express
will continue to provide the same level of services in all states in
which it operates. (Suppl. 3, June 21, 2023.) Applicants further
explain that, following the transaction, Express will offer
substantially the same charter and contract transportation services
currently provided by James, and that James' current motor coach fleet
is sufficient in size to meet the requirements of James' charter and
contract service customer base. (Id. at 3-5.) Thus, the transaction
will have little or no impact on competing passenger charter and
contract motor carriers because Express would simply be replacing James
as the operator in the Richmond and Norfolk markets that James
primarily serves, which, according to Applicants, are separate from the
markets served by Express from Northern Virginia. (Id. at 6.)
Applicants also assert that James' motor coach operations outside
Virginia are ``minimal, approximately 13% of total charter and contract
operations''; state that the Express motor carrier affiliates (Lines,
Airport, and Bus (FL)) do not conduct any regular and primary charter
or contract passenger service operations in Virginia, the primary
market in which James operates; and claim that due to these limiting
factors, they do not anticipate that the acquisition of James' motor
coach assets will have a substantial negative impact on competitors.
(Id. at 6-7.) \6\
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\6\ The Board notes that the asset purchase agreement contains a
non-compete agreement, which prohibits James and its affiliates
(except for Stephen Story, whose arrangement is governed by a
consulting agreement), for a period of time, from soliciting the
customer client base sold to Express or otherwise competing with
Express in the geographic areas in which James currently conducts
business operations. (Appl., Ex. C art. 10.01.) After a review of
the contractual provision, and based on the verified information
submitted by Applicants regarding the limited amount of market
overlap, the Board finds that the clause does not appear to have an
anticompetitive effect, on balance, in the markets in which
Applicants operate.
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Based on Applicants' representations, 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 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 September 6, 2023, unless opposing
comments are filed by September 5, 2023. If any comments are filed,
Applicant may file a reply by September 19, 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: July 17, 2023.
By the Board, Board Members Fuchs, Hedlund, Oberman, Primus, and
Schultz.
Eden Besera,
Clearance Clerk.
[FR Doc. 2023-15531 Filed 7-20-23; 8:45 am]
BILLING CODE 4915-01-P