Coach America, one of the country’s biggest bus operators, filed on Tuesday for bankruptcy protection to cut its debt load.
The company, which filed in Delaware bankruptcy court, attributed its decision for file for Chapter 11 protection on the burden imposed by its large debt load. As of Nov. 30, it had about $402 million in liabilities and $274 million in assets.
While Coach America maintained in court documents that its operations were relatively solid, it has posted consecutive yearly losses. For the 11 months that ended Nov. 30, it reported $417 million in revenue but lost $27 million.
With more than 3,000 vehicles in its fleet, the company claims to be the largest tour and charter bus service operator in the country.
“Coach America has, for too long, been constrained by our capital structure, and today’s decision will ensure a stronger company focused on delivering critical transportation services to our customers across the country,” George Maney, the company’s chief executive, said in a statement.
Its largest unsecured creditors include Universal Studios and SC Fuels.
To finance its operations in bankruptcy, Coach America lined up a $30 million loan from its existing senior lenders, led by JPMorgan Chase. The company plans no interruptions in service while it reorganizes its finances.
The Chapter 11 filing is a blow to Coach America’s majority owner, the private equity firm Fenway Partners. Fenway first invested in the company in 2007, spending $60 million, according to the investment firm’s Web site.
Coach America is being advised by Rothschild, the law firm Lowenstein Sandler and the consulting firm Alvarez Marsal.
Coach America Bankruptcy Petition
Coach America Bankruptcy Affidavit
Article source: http://feeds.nytimes.com/click.phdo?i=f3c8431a287a253c54540e25ad9a039d
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