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All Aboard America! Holdings, Inc.--Acquisition of Control--Lux Bus America Co.

American Government Special Collections Reference Desk

American Government Buses Topics:  All Aboard America!, Lux Bus America

All Aboard America! Holdings, Inc.--Acquisition of Control--Lux Bus America Co.

Tammy Lowery
Surface Transportation Board
21 September 2018


[Federal Register Volume 83, Number 184 (Friday, September 21, 2018)]
[Notices]
[Pages 47958-47960]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-20550]


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SURFACE TRANSPORTATION BOARD

[Docket No. MCF 21082]


All Aboard America! Holdings, Inc.--Acquisition of Control--Lux 
Bus America Co.

AGENCY: Surface Transportation Board.

ACTION: Notice Tentatively Approving and Authorizing Finance 
Transaction.

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SUMMARY: On August 14, 2018, All Aboard America! Holdings, Inc. 
(AAAHI), a noncarrier, filed an application under 49 U.S.C. 14303 for 
AAAHI to acquire a 100% equity interest in Lux Bus America Co. (Lux 
Bus), an interstate motor carrier of passengers. On August 23, 2018, 
AAAHI filed a supplement to its application. 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 at 49 CFR 
1182.5 and 1182.8.

DATES: Comments must be filed by November 5, 2018. The applicant may 
file a reply by November 20, 2018. If no opposing comments are filed by 
November 5, 2018, this notice shall be effective November 6, 2018.

ADDRESSES: Send an original and 10 copies of any comments referring to 
Docket No. MCF 21082 to: Surface Transportation Board, 395 E Street SW, 
Washington, DC 20423-0001. In addition, send one copy of comments to 
AAAHI's representative: Andrew K. Light, Scopelitis, Garvin, Light, 
Hanson, & Feary, P.C., 10 W Market Street, Suite 1400, Indianapolis, IN 
46204.

FOR FURTHER INFORMATION CONTACT: Nathaniel Bawcombe (202) 245-0376. 
Federal Information Relay Service (FIRS) for the hearing impaired: 1-
800-877-8339.

SUPPLEMENTARY INFORMATION: AAAHI is a Delaware corporation and a 
noncarrier. AAAHI is wholly owned by AAAHI Acquisition Corporation, a 
corporation and noncarrier, which in turn is wholly owned by AAAHI 
Intermediate Holdings LLC, a limited liability company and noncarrier. 
AAAHI Intermediate Holdings LLC is wholly owned by AAAHI TopCo 
Corporation, a corporation and noncarrier, which is in turn wholly 
owned by AAAHI Holdings LLC, a limited liability company and 
noncarrier. 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 Capital GP LLC, a 
limited liability company and noncarrier.
    AAAHI controls the following motor carriers of passengers (the 
Affiliated Carriers): AAAHI Regional Acquisition Corporation (ARAC); 
Ace Express Coaches, LLC (ACE); Hotard Coaches, Inc. (Hotard); 
Industrial Bus Lines, Inc. (Industrial); McClintock Enterprises Inc. 
(McClintock); and Sureride Charter Inc. (Sureride).
    AAAHI provides a description of each of the Affiliated Carriers, as 
summarized below:
     ARAC is a recently formed motor carrier that has not yet 
begun its passenger transportation activities. The USDOT Number 
assigned to ARAC is 3140195, but ARAC does not yet have a USDOT Safety 
Rating. ARAC holds interstate operating authority from the Federal 
Motor Carrier Safety Administration (FMCSA) under MC-098597. As ARAC 
has not yet commenced its passenger service operations, it does not 
currently utilize any vehicles or drivers.
     Ace is an interstate motor carrier providing regional 
charter, contract, and casino passenger charter services in the state 
of Colorado and surrounding areas. The USDOT Number assigned to Ace is

[[Page 47959]]

2589674, and Ace has a ``Satisfactory'' USDOT Safety Rating. Ace holds 
interstate operating authority from FMCSA under MC-908184. In providing 
its services, Ace utilizes approximately 80 vehicles and 99 drivers.
     Hotard is an interstate motor carrier providing local and 
regional passenger charter services primarily within the states of 
Louisiana and Mississippi. The USDOT Number assigned to Hotard is 
156451, and Hotard has a ``Satisfactory'' USDOT Safety Rating. Hotard 
holds interstate operating authority from FMCSA under MC-143881. In 
providing its services, Hotard utilizes approximately 295 vehicles and 
308 drivers.
     Industrial, doing business as All Aboard America, is an 
interstate motor carrier providing local and regional passenger charter 
services generally in the states of Arizona, New Mexico, and Texas. The 
USDOT Number assigned to Industrial is 27402, and Industrial has a 
``Satisfactory'' USDOT Safety Rating. Industrial holds interstate 
operating authority from FMCSA under MC-133171. In providing its 
services, Industrial utilizes approximately 116 vehicles and 140 
drivers.
     McClintock, doing business as Goldfield Stage & Co., is an 
interstate motor carrier providing local and regional passenger 
charter, tour, and contract shuttle services in south California and 
surrounding areas. The USDOT Number assigned to McClintock is 291979, 
and McClintock has a ``Satisfactory'' USDOT Safety Rating. McClintock 
holds interstate operating authority from FMCSA under MC-191442. In 
providing its services, McClintock utilizes approximately 27 vehicles 
and 62 drivers.
     Sureride, doing business as Sundiego Charter Co. and 
SunExpress Charter Co., is an interstate motor carrier providing local 
and regional passenger charter, tour, and contract shuttle services in 
south California and surrounding areas. The USDOT Number assigned to 
Sureride is 701846, and Sureride has a ``Satisfactory'' USDOT Safety 
Rating. Sureride holds interstate operating authority from FMCSA under 
MC-324772. In providing its services, Sureride utilizes approximately 
104 vehicles and 106 drivers.
    AAAHI explains that under the proposed transaction, it would 
acquire 100% of the equity interest in Lux Bus. AAAHI states that Lux 
Bus is a California corporation that provides interstate and intrastate 
passenger group charter motor coach and shuttle services in the Los 
Angeles, Cal. and San Francisco, Cal. areas. Lux Bus also provides 
daily round trip and one-way individual passenger service from the Los 
Angeles area to Las Vegas, Nev., along with individual tour services to 
amusement attractions in the greater Los Angeles area. Lux Bus utilizes 
terminals and maintenance facilities located in Anaheim, San Jose and 
Stockton, Cal. The USDOT Number assigned to Lux Bus is 1125439, and Lux 
Bus has a ``Satisfactory'' USDOT Safety Rating. Lux Bus holds 
interstate operating authority from FMCSA under MC-459355. For purposes 
of its California intrastate operations, Lux Bus operates pursuant to 
intrastate authority issued by the California Public Utilities 
Commission (CPUC) under Class A Passenger Charter Certificate No. TCP 
22650-A. In providing its services, Lux Bus utilizes approximately 160 
vehicles and 192 drivers.\1\
---------------------------------------------------------------------------

    \1\ AAAHI also states that, as part of the proposed transaction, 
it will acquire control of Lux Leasing, LLC (Lux Leasing), a 
California limited liability company and a motor carrier. However, 
as AAAHI explains, Lux Leasing does not provide interstate 
transportation and does not have a USDOT number or interstate 
operating authority from FMCSA. According to AAAHI, Lux Leasing 
operates only in California, providing intrastate transportation 
pursuant to authority issued by the CPUC. Because Lux Leasing does 
not engage in interstate transportation, Lux Leasing is not subject 
to the Board's jurisdiction and the acquisition of Lux Leasing is 
not subject to the Board's acquisition authority under 49 U.S.C. 
14303. See 49 U.S.C. 14303 (stating that certain ``transactions 
involving motor carriers of passengers subject to jurisdiction under 
subchapter I of chapter 135 may be carried out only with the 
approval of the Board.'' (emphasis added)); 49 U.S.C. 13501 (stating 
that the Board has jurisdiction only over motor carriers that 
provide interstate transportation).
---------------------------------------------------------------------------

    All of the equity interests in Lux Bus are held by Matthew Brown 
and David Brown. Matthew Brown is an individual resident of the state 
of California and citizen of the United States. Matthew Brown does not 
have any direct or indirect ownership interest in any other interstate 
passenger motor carrier. David Brown is also an individual resident of 
the state of California and citizen of the United States. In addition 
to his interest in Lux Bus, David Brown has a 50% equity ownership 
interest in Expeditors By Lindale, Inc., doing business as Expeditors 
(Expeditors). Expeditors is a motor carrier of passengers that 
primarily provides equipment and services for disaster support (such as 
support for wildland firefighting crews) in California and surrounding 
areas. The USDOT Number assigned to Expeditors is 459936, and 
Expeditors has a ``Satisfactory'' USDOT Safety Rating. Expeditors holds 
interstate carrier operating authority from FMCSA under MC-246949. In 
providing its services, Expeditors utilizes approximately 37 vehicles 
and 38 drivers. Expeditors is not a party to, nor is it a subject of, 
the proposed transaction. Apart from Lux Bus and Expeditors, David 
Brown does not have any direct or indirect ownership interest in any 
other interstate passenger motor carrier.
    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 that result; and (3) the interest of affected carrier 
employees. AAAHI 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) and a statement that the gross operating revenues of Lux Bus, 
AAAHI, and the Affiliated Carriers (which, as described above, are 
controlled by AAAHI) exceeded $2 million for the 12-month period 
immediately preceding the filing of AAAHI's application. See 49 U.S.C. 
14303(g).\2\
---------------------------------------------------------------------------

    \2\ Parties must certify that the transaction involves carriers 
whose aggregate gross operating revenues exceed $2 million, as 
required under 49 CFR 1182.2(a)(5).
---------------------------------------------------------------------------

    AAAHI asserts that the proposed transaction would not have a 
material, detrimental impact on the adequacy of transportation services 
available for the public. AAAHI explains that it anticipates that 
services to the public would be improved because Lux Bus would continue 
to operate, but going forward, it would operate as part of AAAHI's 
corporate family, an organization thoroughly experienced in passenger 
transportation operations. AAAHI further states that it intends to use 
its business and financial management skills, as well as its capital, 
to increase the efficiencies and enhance the viability of Lux Bus, 
thereby ensuring the continued availability of adequate passenger 
transportation service for the public. AAAHI also explains that the 
same services currently provided by Lux Bus would continue to be 
provided under the same name currently used to provide such services.
    With respect to fixed charges, AAAHI states that there are no 
significant fixed charges associated with the proposed transaction.
    Regarding the interests of employees, AAAHI asserts that it intends 
to continue the existing operations of Lux Bus and therefore ``does not 
anticipate a measurable reduction in force or changes in compensation 
levels and/or benefits.'' (AAAHI App. 8.) However,

[[Page 47960]]

AAAHI notes that ``staffing redundancies could potentially result in 
limited downsizing of back-office and/or managerial level personnel.'' 
(Id.)
    Finally, AAAHI states that the impact of the proposed transaction 
on the regulated motor carrier industry would be minimal and that 
neither competition nor the public interest would be adversely 
affected. AAAHI cites Board precedent finding that there are low 
barriers to entry in the passenger motor carrier industry and that the 
industry is characterized by healthy intramodal and intermodal 
competition. AAAHI also states that the Board has consistently found 
that the acquisition of control of numerous motor carriers by a non-
carrier can result in better overall service without harming 
competition. AAAHI goes on to explain that there are a substantial 
number of competitors operating in the markets in which Lux Bus 
competes (i.e., the markets for charter and shuttle services in the Los 
Angeles and San Francisco areas; tour services to amusement attractions 
in the Los Angeles area; and daily roundtrip and one-way service 
between Los Angeles and Las Vegas). Specifically, AAAHI states that 
there are a variety of charter and shuttle service providers where it 
operates, ranging from small charter and tour operators to very large 
corporate charter operators, and that service between Los Angeles and 
Las Vegas is provided by a number of other motor carriers as well as 
airlines. AAAHI further states that there is limited, if any, overlap 
in service areas or in customer bases among the Affiliated Carriers and 
Lux Bus.
    On the basis of the application, 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 on our website 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 as having been vacated.
    3. This notice will be effective November 6, 2018, unless opposing 
comments are filed by November 5, 2018.
    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: September 17, 2018.

    By the Board, Board Members Begeman and Miller.
Tammy Lowery,
Clearance Clerk.
[FR Doc. 2018-20550 Filed 9-20-18; 8:45 am]
 BILLING CODE 4915-01-P

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