Steven Church
Tue, Jun 11, 2024
(Bloomberg) -- Bus company Coach USA, owner of the Megabus brand, filed for bankruptcy, saying it was unable to recover from a decline in ridership brought on by the
The company owes creditors between $100 and $500 million, according to its Chapter 11 petition filed Tuesday in Wilmington, Delaware. Chapter 11 of the US Bankruptcy Code is designed to allow companies to keep operating while they shed debt and reorganize.
Coach USA said in a statement that the filing is intended to facilitate the sale of certain bus lines to an affiliate of Renco Group, as well as its Megabus intellectual property and retail operations. Avalon Transportation has also agreed to buy some Coach assets, the company said.
Both buyers have agreed to act as initial bidders at a court-supervised auction, the company said. The auction process and the initial bids must first be approved by the judge overseeing the bankruptcy.
To help pay for the restructuring case and to keep operating during bankruptcy, the company has arranged to borrow as much as $20 million.
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Coach offers bus services in 27 locations in the US and Canada and carries more than 38 million passengers every year, according to its website. Its Megabus service has carried more than 50 million people through more than 280 cities since it was started in 2006.
The case is Coach USA, Inc. 24-11258, US Bankruptcy Court, District of Delaware (Wilmington).
Bloomberg Businessweek
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