A bankruptcy court and debtors of Atlantic Express chose School Wheels Direct, a division of school bus contractor Student Transportation Inc., to manage all California operations beginning tomorrow to avoid disruption of service to thousands of local students.
School Wheels Direct signed a management agreement to take over operations for the Los Angeles and Long Beach unified school districts as well as several private and charter schools in Southern California. An asset purchase agreement was also approved by the Bankruptcy Court for the Southern District of New York, allowing STI’s Student Transportation of America (STA) to purchase Atlantic Express’ California assets, including vehicles and school district contracts. The latter includes 425 vehicles and an annual revenue of $25 million in district contracts, which are contingent upon approval by those districts as well as the close of final negotiations between Atlantic Express debtors and creditors.
“Atlantic Express has a very good service reputation in California and we are pleased that our company, SchoolWheels Direct, Inc., has been chosen by the court and the debtors to operate and manage the California business until such time negotiations are final on the purchase of the vehicles and suitable arrangements for a seamless transition can take place,” said Denis Gallagher, CEO of STI.
He added that he hopes the transfer of Atlantic Express’ business to his local subsidiary occurs by the end of March, yet noted “it could be much sooner.”
“Our SchoolWheels Direct business has been growing in many states with various transportation and management services contracts,” he said in a statement. “Our history and expertise in the industry is what the court and Atlantic Express’ debtors were seeking to ensure customers and employees there would be continuity in service without disruption.”
STI has been operating in California since 1997 through STA, which has also served L.A. Unified for the past four years.
Atlantic Express filed for bankruptcy protection in early November and last month closed its doors at corporate after the company could not reach a contractual agreement with a New York City school bus drivers union. Last year Mayor Michael Bloomberg and the schools chancellor pushed through a rebid of contracts without certain employee protection clauses, the first such rebid in more than 30 years. By not signing the contract, Atlantic Express could not satisfy requirements laid forth by its bank, Wells Fargo.
