Silverado Stages, Inc.-Acquisition of Control-Michelangelo Leasing, Inc. and Ryan's Express Transportation Services, Inc., 47485-47486 [2016-17228]

Agencies

• Surface Transportation Board

[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