DALLAS — Coach America Holdings Inc., headquartered in Dallas, announced the company and its subsidiaries have filed a voluntary petition for Chapter 11 reorganization in the U.S. Bankruptcy Court for the District of Delaware after being unable to restructure more than $400 million of debt. Private equity firm Fenway Partners is the main sponsor for Coach America, which said it has lost $207 million since the end of 2009.
Coach America said it has obtained $30 million of debtor-in-possession financing from lenders led by JPMorgan Chase & Co to keep operating while in bankruptcy. This financing is subject to approval by the Bankruptcy Court and will support the company's fleet investment and help ensure the following:
- Providing uninterrupted transportation services safely and reliably.
- Honoring all tickets and reservations, including making exchanges and refunds in the normal course.
- Providing employee wages, healthcare coverage, vacation, and other benefits, without interruption.
- Paying suppliers for goods and services received during the reorganization process.
Coach America provides motorcoach charters, tours and sightseeing, commuter transportation, airport and casino shuttles, rail crew transportation, and contract services for municipalities and corporations all throughout the U.S. It operates more than 3,000 vehicles, including more than 1,600 motorcoaches, primarily under the Coach America, American Coach Lines and Gray Line brands.
The company is discussing a restructuring with its lenders to position it for future growth and competitive success.
“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,” said George Maney, president/CEO of Coach America. “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.”
Coach America's investment banker is Rothschild Inc., legal counsel is Lowenstein Sandler PC, and its financial advisor is Alvarez & Marsal North America LLC.
More information about Coach America's Chapter 11 filing, including resources for customers and suppliers, is available on the Internet at www.coachamerica.com/restructure.
Update, 1/5/2012: Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware granted Coach America approval on a series of first day motions filed to help support its customers, employees, suppliers and business partners; to obtain interim financing authority; to maintain existing cash management systems; and to pay vendors and suppliers in the ordinary course of business, according to a company statement. Read the full report here.
Source: Metro Magazine; Reuters