[Federal Register Volume 81, Number 140 (Thursday, July 21, 2016)]
[Notices]
[Pages 47485-47486]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-17228]
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SURFACE TRANSPORTATION BOARD
[Docket No. MCF 21068]
Silverado Stages, Inc.--Acquisition of Control--Michelangelo
Leasing, Inc. and Ryan's Express Transportation Services, Inc.
AGENCY: Surface Transportation Board.
ACTION: Notice tentatively approving and authorizing finance
transaction.
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SUMMARY: On June 21, 2016, Silverado Stages, Inc. (Silverado) filed an
application under 49 U.S.C. 14303 seeking approval for its acquisition
and control of the stock of Michelangelo Leasing, Inc. (Michelangelo)
and Ryan's Express Transportation Services, Inc. (Ryan), a corporation
wholly owned and controlled by Michelangelo. In its application,
Silverado also requests retroactive approval of its acquisition of
control of five subsidiaries and retroactive approval of Michelangelo's
acquisition of control of Ryan. The Board is tentatively approving and
authorizing the transaction before it, but is not granting retroactive
approval of Silverado or Michelangelo's previous acquisitions. If no
opposing comments are timely filed, this notice will be the final Board
action. Persons wishing to oppose the application must follow the rules
at 49 CFR 1182.5 and 1182.8.
DATES: Comments must be filed by September 6, 2016. Silverado may file
a reply by September 19, 2016. If no opposing comments are filed by
September 6, 2016, this notice shall be effective on September 7, 2016.
ADDRESSES: Send an original and 10 copies of any comments referring to
Docket No. MCF 21068 to: Surface Transportation Board, 395 E Street
SW., Washington, DC 20423-0001. In addition, send one copy of comments
to Applicant's representative: David H. Coburn, Steptoe & Johnson, LLP,
1330 Connecticut Ave. NW., Washington, DC 20036.
FOR FURTHER INFORMATION CONTACT: Jonathon Binet (202) 245-0368. Federal
Information Relay Service (FIRS) for the hearing impaired: 1-800-877-
8339.
SUPPLEMENTARY INFORMATION: Silverado, a Wyoming corporation, is a
federally regulated interstate motor carrier of passengers (MC-230881)
providing charter and tour bus transportation services to the public
throughout California from its terminals in San Luis Obispo,
Sacramento, Santa Ana, Pomona, and Santa Barbara. Silverado states that
it also provides intrastate airport and shuttle services, and charter
and tour services in the Las Vegas, Nev., Los Angeles, Cal., and
Cheyenne, Wyo. areas either directly or through its subsidiaries.
According to Silverado, it owns five motor carrier subsidiaries, three
of which conduct operations: Silverado Stages NV LLC (MC-936678)
(providing interstate and intrastate charter and tour services in the
Las Vegas area and a fixed route between Las Vegas and Reno), Silverado
Stages SC LLC (MC-937520) (providing interstate charter and tour
services in California and intracity shuttle service in the Los Angeles
area), Silverado Stages WY LLC (MC-937467) (providing charter and tour
bus services in the Cheyenne area), Silverado Stages NC LLC (Silverado
NC) (MC-937511), and Silverado Stages CC LLC (Silverado CC) (MC-
938086).\1\ Silverado states that the subsidiaries were established in
March and April 2015 and procured federal operating authority in
November 2015.\2\ Silverado also states that it is owned and controlled
by individual stockholders.
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\1\ Silverado states that Silverado NC and Silverado CC are non-
operating entities. Both are incorporated in California and
headquartered in San Luis Obispo.
\2\ Silverado states that at the time it obtained control of the
subsidiaries it was not aware of the requirements under 49 U.S.C.
14303 to obtain Board approval of its acquisition of control of more
than one motor carrier of passengers. Silverado now seeks
retroactive approval of the acquisition of its five subsidiaries.
The Board generally does not make retroactive grants of authority.
See Rose Chaffeured Transp., Ltd.--Acquis. of Control--MY Bus
division of Cherry Consulting of the Carolinas, Inc., MCF 21066 (STB
served May 11, 2016); V & S Ry.--Acquis. & Operation Exemption--
Colo. Dept. of Transp., FD 35664 (STB served Nov. 13, 2012); Coach
USA, Inc., and Yellow Cab Service Corp.--Control--Ross Tours, Inc.,
MCF 20945, et al. (STB served May 14, 1999). The Board will
tentatively approve and authorize Silverado's acquisitions of its
five subsidiaries as part of the overall transaction at issue here,
but only as of the date of service of this decision, not
retroactively.
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Silverado further states that Michelangelo, a privately held
Arizona corporation, is a federally regulated motor carrier of
passengers (MC-419004) that provides charter, tour, and local shuttle
transportation. Silverado states that Eugene Bronson, the president and
CEO of Michelangelo and Ryan, owns 100% of Michelangelo's stock.
According to Silverado, Michelangelo provides its services in the
Phoenix, Ariz., Las Vegas, Nev., and Los Angeles, Cal., markets
utilizing 145 motor coaches, 11 mini-buses, 3 vans, and 4 limousines.
Michelangelo also owns and controls Ryan, a federally regulated motor
carrier of passengers (MC-348310).\3\ Silverado states that
[[Page 47486]]
Ryan also operates charter services in the Phoenix, Las Vegas, and Los
Angeles markets utilizing 52 motor coaches and 4 minibuses. Silverado
states that Michelangelo is also the owner and managing member of White
Tie International LLC, a non-regulated motor carrier that provides
intrastate sedan and limousine charters and tours in the Sedona, Ariz.
area.
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\3\ Silverado states that Michelangelo acquired control of Ryan
in 2015 and that, at the time, Michelangelo was not aware of the
requirements under 49 U.S.C. 14303 to obtain Board approval of its
acquisition of control of another motor carrier of passengers.
Michelangelo now seeks retroactive approval of its acquisition of
control Ryan. The Board generally does not grant retroactive
authority. See supra n.2. The Board will tentatively approve and
authorize Michelangelo's acquisition of control of Ryan as part of
the overall transaction at issue here, but only as of the date of
service of this decision, not retroactively.
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Silverado seeks Board authority for its acquisition and control of
Michelangelo and Ryan through a stock purchase agreement. Specifically,
Silverado states that it would acquire full control of Michelangelo's
operations, equipment, and operating authority, as well as the
operations, equipment, and operating authority of Ryan, and that these
operations would be merged under the Silverado brand and management.
Silverado states that Bronson would receive cash and a 14.45% ownership
of stock.\4\ Silverado explains that it plans to restructure
approximately $38 million in current debt of Silverado and
Michelangelo.
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\4\ Silverado's application included a chart with stockholders'
names, shares, and percentage of ownership before and after the
proposed transaction.
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Under 49 U.S.C. 14303(b), the Board must approve and authorize a
transaction that it finds consistent with the public interest, taking
into consideration at least: (1) The effect of the proposed transaction
on the adequacy of transportation to the public; (2) the total fixed
charges that result; and (3) the interest of affected carrier
employees. Silverado submitted information, as required by 49 CFR
1182.2, including information to demonstrate that the proposed
transaction is consistent with the public interest under 49 U.S.C.
14303(b), and a statement that the aggregate gross operating revenues
of Silverado and Michelangelo exceeded $2 million for the preceding 12-
month period, see 49 U.S.C. 14303(g).\5\
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\5\ Applicants with gross operating revenues exceeding $2
million are required to meet the requirements of 49 CFR 1182.
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Silverado addresses the adequacy of transportation to the public by
stating that the proposed transaction would not result in significant
changes to the nature or scope of services that are currently conducted
by Silverado, Michelangelo, or Ryan. Silverado states that the
transaction would allow for the continuation of operations while
eliminating duplicate administrative and managerial functions.
Silverado anticipates improved public service through the debt
restructure that will allow Silverado to access lower interest costs so
that it can more readily replace aging vehicles and purchase newer
vehicles on more favorable terms. With respect to fixed charges,
Silverado asserts the debt restructure will reduce fixed charges by
improving its financial position and reducing future interest costs
associated with vehicle and other financing. Regarding the effect of
the transaction on employees, Silverado states that the proposed
transaction will consolidate some headquarter and administrative
functions, but expects that its improved financial returns will
strengthen its ability to retain employees and expand future employment
opportunities.
Silverado further claims that competition will not be materially
adversely impacted by the proposed transaction. Citing agency precedent
finding low entry barriers in the interstate bus industry, Silverado
states that the areas of Los Angeles and Las Vegas, where its services
overlap with Michelangelo and Ryan, have robust carrier competition.
Specifically, Silverado asserts that competing bus carriers in the Los
Angeles area that operate charter and/or tour services include
Tourcoach, Gold Coast Tours, Pacific Coachways, and Transportation
Charter Services, among other carriers. Similarly, Silverado states
that Las Vegas also has a large number of carriers providing charter
and/or tour services. Specifically, according to Silverado, competing
bus carriers in the Las Vegas area include Arrow Stage Lines, Lewis
Brothers, Grand Canyon Coaches, Alan Waxler Group Charter services, and
other operators. The operations of Michelangelo and Ryan also overlap
in these markets as well as in Phoenix.
The Board finds that the acquisition described in the application
(including Silverado's acquisition of the five subsidiaries,
Michelangelo's acquisition of Ryan, and Silverado's acquisition of
Michelangelo and Ryan), is consistent with the public interest and
should be tentatively approved and authorized. If any opposing comments
are timely filed, these findings will be deemed vacated, and, unless a
final decision can be made on the record as developed, a procedural
schedule will be adopted to reconsider the application. See 49 CFR
1182.6(c). If no opposing comments are filed by the expiration of the
comment period, this notice will take effect automatically and will be
the final Board action.
This action is categorically excluded from environmental review
under 49 CFR 1105.6(c).
Board decisions and notices are available on our Web site at
WWW.STB.DOT.GOV.
It is ordered:
1. The proposed transaction is approved and authorized as described
above, subject to the filing of opposing comments.
2. If opposing comments are timely filed, the findings made in this
notice will be deemed vacated.
3. This notice will be effective September 7, 2016, unless opposing
comments are filed by September 6, 2016.
4. A copy of this notice will be served on: (1) The U.S. Department
of Transportation, Federal Motor Carrier Safety Administration, 1200
New Jersey Avenue SE., Washington, DC 20590; (2) the U.S. Department of
Justice, Antitrust Division, 10th Street & Pennsylvania Avenue NW.,
Washington, DC 20530; and (3) the U.S. Department of Transportation,
Office of the General Counsel, 1200 New Jersey Avenue SE., Washington,
DC 20590.
Decided: July 18, 2016.
By the Board, Chairman Elliott, Vice Chairman Miller, and
Commissioner Begeman.
Tia Delano,
Clearance Clerk.
[FR Doc. 2016-17228 Filed 7-20-16; 8:45 am]
BILLING CODE 4915-01-P