Coach America files Chapter 11

Last week, Coach America, one of America’s biggest bus operators, filed for Chapter 11 in Delaware bankruptcy court to protect itself from creditors. As of late November the company, with its more than 3,000-vehicle fleet, was reportedly $402 million in debts and some $274 million in assets. While it reorganizes Coach America foresees no disruption of services or employee wages and healthcare coverage.

The company’s largest creditors include Universal Studios and SC Fuels. Coach America’s investment banker is Rothschild Inc., legal counsel is Lowenstein Sandler PC, and its financial adviser is Alvarez & Marsal North America LLC. Coach America has obtained a commitment for $30 million of debtor-in-possession (DIP) financing from a steering committee of its existing senior lenders. This financing, subject to approval by the Bankruptcy Court, will support the Company’s fleet investment and help ensure the continuation of normal operations.

George Maney, president and CEO of Coach America, said in a statement: “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. I want to emphasize that it is business as usual for Coach America throughout the Chapter 11 process, and we look forward to a right-sized capital structure that will enhance our competitiveness and ability to serve our customers going forward.”

Brian Cejka, Coach America’s chief restructuring officer, added, “We appreciate the support and commitment of our lending group and debt holders, and are focused on an effective, expeditious process to enhance Coach America’s competitiveness and value for all stakeholders.”

Coach America operates 1,623 full size motor coaches, 351 minibuses and cutaways, 902 vans and 39 trolleys. The Coach America brand operates under the well recognized Coach America, CUSA, Coach USA, American Coach Lines and Gray Line brands. Founded in 2003, Coach America is headquartered in Dallas, TX.

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