INDUSTRY CONNECTIONS: SPECIAL REPORT MOVING PARTS
A BANKRUPTCY COURT APPROVES A MANAGEMENT AGREEMENT WITH SCHOOL WHEELS DIRECT UNTIL PARENT STUDENT TRANSPORTATION INC. COMPLETES ACQUISITION OF ATLANTIC EXPRESS' FORMER CALIFORNIA CONTRACTS
WRITTEN BY MICHELLE FISHER “C
ontinuity in service without disruption” has been the mantra for some of the coun-
try’s largest school districts ever since school bus contractor Atlantic Express announced it would close its doors at the end of 2013. Te 40-year-old contractor filed for
bankruptcy in November in response to New York City rebidding all bus-service contracts last year for the first time since the 1970s. Te death knell for Atlantic Express sounded in a month later after a local school-bus driver union rejected a contract the company’s bank required to be signed. Te announced closure put dozens of contracts up in the air in New York, New Jersey, Connecticut, Massachu- setts and Pennsylvania — and sent transportation managers scurrying to lock up contingency plans to prevent service disruptions in the new year. Yet, a different story has unfolded in
Southern California, where transporta- tion chiefs at two major metropolitan school districts affirmed they had assurances from Atlantic Express that everything would go smoothly, whether the company ended up negotiating an internal or external sale. On Jan. 8, School Wheels Direct,
a division of Student Transportation Inc. (STI), received approval from a bankruptcy court to take over manage- ment of all California operations the very next day. For Long Beach Unified School District, located 23 miles southwest of Los Angeles, this entails operating 127 special-education routes. “Atlantic Express called yesterday
to tell me the management agreement would take effect today,” LBUSD Transportation Director Paul Bailey said minutes before meeting with representatives of STA, the U.S. arm
34 School Transportation News February 2014
£The Atlantic Express name, as seen here on a New York school bus, is disappearing nationwide as contingency plans are in place to continue operations under new names.
of STI. “Part of the reason they are in a management contract is so (School Wheels Direct) will take over paying all the bills and receiving income, handling it independently and overseeing the transition before STA purchases Atlan- tic’s operations in Long Beach and Los Angeles, which are separate contracts.” Te asset purchase agreement
approved by the Bankruptcy Court for the Southern District of New York will allow STA to buy Atlantic’s California assets, which includes 425 vehicles and some $25 million in annual revenue in school district contracts — not only for Long Beach and Los Angeles Uni- fied but also several private and charter schools in Southern California. Te contracts are subject to the approval of these districts as well as the close of final negotiations between Atlantic’s debtors and creditors. Bailey added that the sales were
delayed partly because Atlantic Express needs to resolve leasing issues with A-Z Bus Sales. Te Colton,
Calif.-based bus dealer objected to the sale of Atlantic’s fleet because it includes A-Z school buses as well. “Atlantic is assuring me, again, that
there’s not going to be a disruption. So far we’ve only had a couple of issues with drivers being late, and we lost two drivers in November when the bank- ruptcy was announced, but that was of their own volition,” said Bailey. “We have many bus drivers who’ve been with us 20, 25 years through seven different companies. Tey’re kind of hanging in. Over this management period; (School Wheels Direct) is not supposed to make any staffing changes.” If Bailey seems unfazed by the up-
heaval, it is because he has dealt with many acquisitions and transfers in the past two decades. “By the time STA comes in, it will be
so close to the end of the school year, I don’t anticipate any changes,” he contin- ued. “Tey (Atlantic) are trying to keep this transition as smooth as possible, and we are holding them to that.”
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84