[Federal Register Volume 63, Number 137 (Friday, July 17, 1998)]
[Notices]
[Pages 38689-38691]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-19128]
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DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[STB Docket No. MC-F-20924]
Global Passenger Services, L.L.C.--Control--Bortner Bus Company,
et al.
AGENCY: Surface Transportation Board.
ACTION: Notice tentatively approving finance transactions.
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SUMMARY: Global Passenger Services, L.L.C. (Global or applicant), a
noncarrier, filed an application under 49 U.S.C. 14303 to acquire
control of 20 motor passenger carriers, consisting of 15 existing
subsidiaries--Bortner Bus Company (Bortner), C&D Transportation, Inc.
(C&D), Comet Bus Lines Corporation (Comet), Connolly's Limousine
Service, Inc. (Connolly's), Country & Western Tours, Inc. (C&W Tours),
Franciscan Lines, Inc. (Franciscan), George Ku, Inc. (George Ku),
Golden Touch Transportation, Inc. (GTT), Golden Touch Limousine of
Florida, Inc. (GTT of FL), JJ Kelly Charter Bus Service Co. (JJ Kelly),
The Palmeri Motor Coach Corporation (Palmeri), PROTRAV Services, Inc.,
d/b/a PROTRAV Charter Coach Services (PROTRAV Charter), PROTRAV
Services, Inc. (PROTRAV Services), Santa Barbara Transportation
Corporation (SBTC), and Tiger Air Express, Inc. (Tiger)--and 5 new
target companies, Hemphill Brothers Coach Co., Inc. (Hemphill),
Hansruedi and Marcia Muggli, d/b/a The Transportation Company (TTC),
Pacific Explorer Lines, Inc. (Pacific), Stardust Executive
Transportation, Inc. (Stardust), and Sunnyland Acquisition Corp.
(SAC).1 Persons wishing to oppose the application must
follow the rules under 49 CFR part 1182, subpart B. The Board has
tentatively approved the transaction, and, if no opposing comments are
timely filed, this notice will be the final Board action.
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\1\ Global incorporated SAC, a noncarrier, to acquire the assets
of Sunnyland Stages, Inc. (SSI), a Missouri corporation and motor
passenger carrier.
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DATES: Comments are due by August 31, 1998. Applicant may reply by
September 21, 1998. If no comments are received by August 31, 1998,
this notice is effective on that date.
ADDRESSES: Send an original and 10 copies of comments referring to STB
Docket No. MC-F-20924 to: Surface Transportation Board, Office of the
Secretary, Case Control Unit, 1925 K Street, N.W., Washington, DC
20423-0001. In addition, send one copy of comments to applicant's
representative: Mark J. Andrews, Barnes & Thornburg, 1401 Eye Street,
N.W., Suite 500, Washington, DC 20005.
FOR FURTHER INFORMATION CONTACT: Beryl Gordon, (202) 565-1600. [TDD for
the hearing impaired: (202) 565-1695.]
SUPPLEMENTARY INFORMATION: Global, a Delaware limited liability
company, was created on May 15, 1997. According to Global, it was
unaware of the requirements of 49 U.S.C. 14303 prior to January
1998.2 After reviewing its records, Global determined that
interstate and/or intrastate passenger authority had been issued to 15
entities out of the 30 corporations that it directly or indirectly
controls at this time. Upon discovering this unresolved control issue,
Global filed an application to acquire control, through indirect stock
ownership, of the existing subsidiaries'Bortner,3
C&D,4 Comet,5 Connolly's,6 C&W Tours,
7 Franciscan, 8 George Ku, 9 GTT,
10 GTT of FL, 11 JJ Kelly, 12 Palmeri,
13 PROTRAV
[[Page 38690]]
Charter, 14 PROTRAV Services, 15 SBTC,
16 and Tiger 17 and of the target companies,
Hemphill, 18 TTC, 19 Pacific, 20
Stardust, 21 and SAC. 22 According to Global, the
stock of the target companies has been placed in voting trusts pending
disposition of this proceeding.
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\2\ Immediately upon its creation, Global acquired the shares of
two regulated motor passenger carriers--one with interstate
authority and one with intrastate authority. Because the initial
acquisition of the shares of a single interstate carrier did not
require Board authorization, Global assumed that the subsequent
stock acquisition of additional interstate carriers required no
Federal approval.
\3\ Bortner is a Pennsylvania corporation. It holds federally
issued operating authority in MC-111191 and intrastate operating
authority in Ohio and Pennsylvania. Bortner provides charter and
special operations between points in the United States (including
Alaska and Hawaii).
\4\ C&D is a Tennessee corporation. It holds federally issued
operating authority in MC-191957. C&D provides charter and special
operations between points in the United States (except Alaska and
Hawaii).
\5\ Comet is a Florida corporation. It holds federally issued
operating authority in MC-231149. Comet provides charter and special
operations between points in the United States (except Hawaii).
\6\ Connolly's is a Pennsylvania corporation. It holds federally
issued operating authority in MC-176826 and intrastate operating
authority in Pennsylvania. Connolly's provides charter and special
operations between points in the United States.
\7\ C&W Tours is a Tennessee corporation. It holds federally
issued operating authority in MC-263068. C&W provides charter and
special operations between points in the United States.
\8\ Franciscan is a California corporation. It holds federally
issued operating authority in MC-140403 and intrastate operating
authority in California. Franciscan provides charter and special
operations between points in the United States (including Alaska,
but excluding Hawaii).
\9\ George Ku is a Pennsylvania corporation. It holds federally
issued operating authority as a common and contract carrier in MC-
31422 and intrastate operating authority in Ohio and Pennsylvania.
George Ku provides charter and special operations between points in
the United States (except Hawaii).
\10\ GTT is a Delaware corporation. It holds federally issued
operating authority as a contract carrier in MC-235493 and
intrastate operating authority in Florida.
\11\ GTT of FL, a wholly owned subsidiary of GTT, is a
corporation that holds no interstate authority but is licensed by
Dade County, FL, for intrastate passenger service. The fact that
these operations appear to be entirely within the State of Florida
is not determinative of Board jurisdiction. It is well settled that
service within a single state may be interstate commerce and subject
to our jurisdiction when there is a through ticket or some other
arrangement between the involved carriers for through transportation
to or from a point in another state. Also, if the participants to a
finance transaction are motor carriers of passengers, subject to
Board jurisdiction under 49 U.S.C. 13501, then under 49 U.S.C.
14303(f), they are subject to our exclusive and plenary jurisdiction
in all matters relating to their consolidation, merger, and
acquisition of control, and this extends to intrastate operating
rights. See Colorado Mountain Express, Inc. and Airport Shuttle
Colorado, Inc., d/b/a Aspen Limousine Service, Inc.--Consolidation
and Merger-- Colorado Mountain Express, STB Docket No. MC-F-20902
(STB served Feb. 28, 1997).
\12\ JJ Kelly is a Florida corporation. It holds federally
issued operating authority in MC-172787. It provides charter and
special operations between points in the United States (except
Alaska and Hawaii).
\13\ Palmeria is a Pennsylvania corporation. It holds federally
issued operating authority in MC-167547 and intrastate operating
authority in New Jersey and Pennsylvania. It provides passenger
service as a contract carrier between points in Tennessee and
Kentucky, and charter and special operations between points in the
United States (except Alaska and Hawaii).
\14\ PROTRAV Charter is a California corporation. It holds
federally issued operating authority in MC-227448 and intrastate
operating authority in California. It provides charter and special
operations between points in the United States (except Alaska and
Hawaii).
\15\ PROTRAV Services, a wholly owned subsidiary of PROTRAV
Charter, is a corporation that holds no interstate authority but is
licensed by Nevada for intrastate passenger service. For a
discussion of the effect of intrastate operating authority, see
supra note 11.
\16\ SBTC is a California corporation. It holds federally issued
operating authority in MC-198757 and intrastate operating authority
in California. SBTC engages primarily in school transportation
activities, which are not regulated.
\17\ Tiger is a Missouri corporation. It holds federally issued
operating authority as a common and contract carrier in MC-217893
and intrastate operating authority in Indiana and Missouri. It
provides passenger service over certain regular routes in Arkansas,
Missouri, and Oklahoma, and charter and special operations between
points in the United States (except Alaska and Hawaii).
\18\ Hemphill is a Tennessee corporation. It holds federally
issued operating authority in MC-336635. It provides charter and
special operations between points in the United States.
\19\ TTC is a California corporation. It holds federally issued
operating authority in MC-182176 and intrastate operating authority
in California. It provides charter and special operations, beginning
and ending at San Francisco and Mateo Counties, CA, and extending to
points in Oregon, Washington, Nevada, Arizona, Utah, and New Mexico.
\20\ Pacific is a California corporation. It holds federally
issued operating authority in MC-251473 and intrastate operating
authority in California. It provides charter and special operations
between points in the United States (except Alaska and Hawaii).
\21\ Stardust is a California corporation. It holds federally
issued operating authority in MC-304399 and intrastate operating
authority in California. It provides charter and special operations
between points in the United States.
\22\ SAC is a Delaware corporation. It is the transferee of
SSI's federally issued operating authority in MC-52479 and
intrastate operating authority in Missouri. It provides passenger
service over certain regular routes in Arkansas and Missouri, and
special and charter operations between points in the United States
(except Hawaii). Because the acquisition of SSI has been structured
as an asset transaction, Global reports that it has trusteed
(presumably placed in trust) SAC, which will become a carrier upon
its acquisition of SSI's assets.
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Global submits that the instant transactions have not reduced and
will not reduce competition in the bus industry or competitive options
available to the traveling public. It also submits that it has no
intention of changing the operations of any of the existing
subsidiaries or target companies as a result of the approvals sought
here. Global asserts that each of the subsidiaries and target companies
faces substantial competition from other bus companies and
transportation modes. It estimates that, at the end of 1997, its
regular-route, charter and special operations accounted for
approximately 0.54% of the relevant market for such services in the
United States. It believes that its control of the target companies
will increase that market share by only one-tenth of a percentage
point.
Global also submits that its control of the subsidiaries and target
companies has produced and will produce substantial benefits, including
interest cost savings from restructuring of debt and reduced operating
costs from Global's enhanced volume purchasing power. Specifically,
Global claims that the carriers it acquires benefit from the lower
insurance premiums it has negotiated and from volume discounts for
equipment and fuel. Global also asserts that it improves the efficiency
of all acquired carriers, while maintaining responsiveness to local
conditions, by providing centralized services to support decentralized
operational and marketing managers. Centralized support services are
provided in such areas as legal affairs, accounting, purchasing, safety
management, equipment maintenance, driver training, human resources,
and environmental compliance. In addition, Global states that it
facilitates vehicle sharing arrangements between acquired entities, so
as to ensure maximum utilization and efficient operation of equipment.
According to Global, the involved transactions offer ongoing benefits
for employees of acquired carriers not only because of the efficiencies
described above, but also because Global's policy is to honor all
collective bargaining agreements of acquired carriers.
Global certifies that: (1) none of the involved subsidiaries or
target companies has been assigned a safety rating of less than
satisfactory by the U.S. Department of Transportation; (2) all involved
carriers maintain sufficient liability insurance; (3) none of the
involved carriers has been or is either domiciled in Mexico or owned or
controlled by persons of that country; and (4) approval of the
transactions will not significantly affect either the quality of the
human environment or the conservation of energy resources. Additional
information may be obtained from applicant's representative.
Under 49 U.S.C. 14303(b), we must approve and authorize a
transaction we find consistent with the public interest, taking into
consideration at least: (1) The effect of the transaction on the
adequacy of transportation to the public; (2) the total fixed charges
that result; and (3) the interest of affected carrier employees. The
prior consummation of the transactions involving the 15 existing
subsidiaries does not bar approval of the application under section
14303 if the evidence establishes that the transaction would be
consistent with the public interest in other respects, and for the
future.23 Approval is granted in such circumstances when the
record contains strong affirmative evidence of public benefits to be
derived from the resulting control, warranting the view that the public
should not be penalized by being deprived of those benefits. Moreover,
in this case, the record shows an absence of intent to flout the law or
of a deliberate or planned violation. See Kenosha Auto Transport
Corp.--Control, 85 M.C.C. 731, 736 (1960).
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\23\ Global seeks nunc pro tunc approval of the control of the
15 existing subsidiaries that it already controls. While we are
granting our tentative approval, the need for retroactive effect has
been demonstrated. Global evidently recognizes that it should have
sought our approval sooner but, under the circumstances, the Board
does not intend to pursue enforcement actions against Global for the
previously unauthorized common control.
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On the basis of the application, we find that the proposed
acquisition of control is consistent with the public interest and
should be authorized. If opposing comments are timely filed, this
finding will be deemed vacated and a procedural schedule will be
adopted to reconsider the application. If no opposing comments are
filed by the expiration of the comment period, this decision will take
effect automatically and will be the final Board action.
This decision will not significantly affect either the quality of
the human environment or the conservation of energy resources.
It is ordered:
1. Global's control of the existing subsidiaries and the target
companies is approved and authorized, subject to the filing of opposing
comments.
2. If timely opposing comments are filed, the findings made in this
decision will be deemed vacated.
3. This decision will be effective on August 31, 1998, unless
timely opposing comments are filed.
4. A copy of this notice will be served on: (1) the U.S. Department
of Transportation, Office of Motor Carriers-HIA 30, 400 Virginia
Avenue, SW, Suite 600, Washington, DC 20024; and (2) the U.S.
Department of Justice, Antitrust Division, 10th Street & Pennsylvania
Avenue, N.W., Washington, DC 20530.
Decided: July 9, 1998.
[[Page 38691]]
By the Board, Chairman Morgan and Vice Chairman Owen.
Vernon A. Williams,
Secretary.
[FR Doc. 98-19128 Filed 7-16-98; 8:45 am]
BILLING CODE 4915-00-P
