One of the nation’s largest school bus operators said it’s business-as-usual for school district clients amid news today that the nearly 50-year-old company filed for protection from creditors because of ongoing challenges with unions, lower earnings and liquidity.
Atlantic Express filed for Chapter 11 with the U.S. Bankruptcy Court for the Southern District of New York. During the reoganization process, the company said it would continue normal operations and “remain committed to providing its customers with safe, reliable and timely student and commuter transportation service.”
The company added that it plans to use the filing to explore the availability of additional debt or equity financing, market its assets for sale and continue its challenging labor negotiations for a new collective bargaining agreement with the Local 1181-1061, Amalgamated Transit Union, AFL-CIO in New York City.
David Carpenter, who is succeeding company founder Dominic Gatto as president and CEO, thanked customers as well as the company’s employees and suppliers for their “support during this challenging financial reorganization process.”
“Quite simply, our current business model in our largest market, New York City, is not sustainable as union labor costs and operating expenses have severely hindered our ability to remain competitive and meet our financial obligations,” he explained. “Following a lengthy review process, and with the assistance of independent financial and legal advisors, our Board of Directors determined that a court-supervised process is the only feasible course of action.”
To continue normal operations, Atlantic Express filed several motions with the Court asking for debtor-in-possession financing and the use of cash collateral, the continuation of its cash management system and other business operations without interruption, as well as the payment of employee wages and benefits. The company also filed a motion that seeks approval of bidding procedures and authorization to sell some or all of its assets in December if it is unable to reach an agreement with Local 1181 on a new collective bargaining agreement and is unable to obtain additional financing.
Atlantic Express operates a coach division in addition to its school buses, which operate mostly in New York, Massachusetts, California and Pennsylvania.
