AAAHI Regional Acquisition LLC-Acquisition of Control-First Class Tours, Inc. and Sierra Stage Coaches, Inc., 58797-58798 [2019-23901]

Agencies

• Surface Transportation Board

[Federal Register Volume 84, Number 212 (Friday, November 1, 2019)]
[Notices]
[Pages 58797-58798]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-23901]


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SURFACE TRANSPORTATION BOARD


AAAHI Regional Acquisition LLC--Acquisition of Control--First 
Class Tours, Inc. and Sierra Stage Coaches, Inc.

AGENCY: Surface Transportation Board.

ACTION: Notice tentatively approving and authorizing finance 
transaction.

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SUMMARY: On October 4, 2019, AAAHI Regional Acquisition LLC (ARA), a 
motor carrier, filed an application to acquire control of two 
interstate passenger motor carriers, First Class Tours, Inc. (First 
Class), and Sierra Stage Coaches, Inc. (Sierra), from their owners, 
Reta Jean (Jean) Rogers, Jeffrey Scott (Jeff) Rogers, and Gregory Bryan 
(Greg) Rogers (collectively, Sellers). The Board is tentatively 
approving and authorizing the transaction, and, 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.

DATES: Comments may be filed by December 16, 2019. ARA may file a reply 
by December 31, 2019. If no opposing comments are filed by December 16, 
2019, this notice shall be effective on December 17, 2019.

ADDRESSES: Comments may be filed with the Board either via e-filing or 
in writing addressed to: Surface Transportation Board, Attn: Docket No. 
MCF 21087, 395 E Street SW, Washington, DC 20423-0001. In addition, 
send one copy of comments to: Andrew K. Light, Scopelitis, Garvin, 
Light, Hanson & Feary, P.C., 10 W Market Street, Suite 1400, 
Indianapolis, IN 46204.

FOR FURTHER INFORMATION CONTACT: Jonathon Binet at (202) 245-0368. 
Assistance for the hearing impaired is available through the Federal 
Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION: According to the application, ARA is a motor 
carrier organized under Delaware law and headquartered in Lakewood, 
Colo. (Appl. 2.) ARA represents that it obtained interstate operating 
authority on July 31, 2018, but has not yet conducted either interstate 
or intrastate operations, and that it does not have a U.S. Department 
of Transportation (USDOT) Safety Rating. (Id.) \1\
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    \1\ According to ARA, it holds interstate operating authority 
from the Federal Motor Carrier Safety Administration (FMCSA) under 
FMCSA Docket No. MC-98597 and has been assigned USDOT Number 
3140195. (Appl. 2.)
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    ARA states that it is indirectly controlled by Tensile Capital GP 
LLC (Tensile), a Delaware limited liability company and noncarrier.\2\ 
(Id.) ARA states that, in addition to ARA, Tensile indirectly controls 
the following passenger motor carriers that hold interstate carrier 
authority (collectively, ARA Affiliated Carriers) (id. at 2-4): \3\
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    \2\ The application states that ARA is wholly owned by All 
Aboard America! Holdings, Inc., which in turn is wholly owned by 
AAAHI Acquisition Corporation. (Appl. 2.) The application further 
states that AAAHI Acquisition Corporation is wholly owned by AAAHI 
Intermediate Holdings LLC, which is wholly owned by AAAHI TopCo 
Corporation, and AAAHI TopCo Corporation is wholly owned by AAAHI 
Holdings LLC. (Id.) According to the application, each of these 
entities is a noncarrier holding company. (Id.) AAAHI Holdings LLC 
is controlled by Tensile Capital Partners Master Fund LP, a limited 
partnership and noncarrier, which in turn is controlled by its 
general partner, Tensile. (Id.) According to ARA, none of these 
companies has motor carrier authority, a USDOT Number, or a USDOT 
Safety Rating. (Id.)
    \3\ Additional information about these motor carriers, including 
USDOT numbers, motor carrier numbers, and USDOT safety ratings, can 
be found in the application. (See Appl. 3-4 & Sched. A.)
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     Ace Express Coaches, LLC, which provides regional charter, 
contract, and casino passenger charter services in Colorado and 
surrounding areas;
     Hotard Coaches, Inc., which provides local and regional 
passenger charter services primarily within Louisiana and Mississippi;
     Industrial Bus Lines, Inc., d/b/a All Aboard America, 
which provides local and regional passenger charter services generally 
in the states of Arizona, New Mexico, and Texas;
     Lux Bus America Co., which provides local and regional 
passenger charter services primarily in California and Nevada;
     Sureride Charter Inc., d/b/a Sun Diego Charter Company and 
Sun Express Charter Co., which provides local and regional passenger 
charter, tour, and contract shuttle services in south California and 
surrounding areas; and
     McClintock Enterprises Inc., d/b/a Goldfield Stage & Co., 
which formerly provided local and regional passenger charter, tour, and 
contract shuttle services in south California and surrounding areas but 
is currently inactive.
    The application states that First Class is a Texas corporation that 
provides interstate charter service between Texas and points throughout 
the United States, Texas intrastate charter service, and intrastate 
weekday park-and-ride commuter services between The Woodlands, Tex., 
and points in Houston, Tex. (Id. at 6.) The application further states 
that First Class has full-service maintenance facilities and two 
terminals in Houston that are used primarily in the operation of daily 
and overnight individual passenger roundtrips to and from casinos in 
Louisiana for pre-formed charter groups. (Id.) First Class holds 
interstate operating authority under FMCSA Docket No. MC-346969, it has 
a ``Satisfactory'' USDOT Safety Rating, and its USDOT number is 774995. 
(Id.) According to the application, First Class uses approximately 66 
vehicles and 99 drivers in providing its services. (Id.) \4\
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    \4\ Additional information about First Class, including 
information about operations pursuant to state and tribal authority, 
can be found in the application. (See Appl. 6.)
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    The application states that Sierra is a Texas corporation that 
provides interstate and intrastate passenger group charter motor coach 
and shuttle services in the Houston area and throughout the United 
States, as well as weekday park-and-ride commuter services between The 
Woodlands and points in Houston, and that Sierra often operates under 
subcontract with First Class. (Id. at 7, 10-11.) Sierra holds 
interstate operating authority under FMCSA Docket No. MC-166321, it has 
a ``Satisfactory'' USDOT Safety Rating, and its USDOT number is 229351. 
(Id. at 7.) According to the application, Sierra uses approximately 27 
vehicles and 25 drivers in providing its services. (Id.) \5\
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    \5\ Additional information about Sierra, including information 
about operations pursuant to state authority, can be found in the 
application. (See Appl. 7.)

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[[Page 58798]]

    The application states that the Sellers collectively own all equity 
interests in First Class and that Greg Rogers has a 100% equity 
ownership interest in Sierra. (Id. at 5.) The application further 
states that Jean Rogers and Jeff Rogers have no direct or indirect 
ownership interests in any interstate passenger motor carrier other 
than First Class and that Greg Rogers has no direct or indirect 
ownership interest in any interstate passenger motor carriers other 
than First Class and Sierra. (Id.)
    ARA represents that, through this transaction, it will acquire 
direct control of the interstate and intrastate passenger motor carrier 
assets and operations of First Class and Sierra. (Id. at 1; see also 
id. at 7.) \6\
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    \6\ ARA also states that, as part of the proposed transaction, 
it will acquire the rolling stock assets of RJR Leasing LLC (RJR), 
which owns and leases vehicles to First Class and Sierra and is 
headquartered in Houston. According to the application, RJR, which 
is collectively owned by Jean Rogers and the Estate of Lanny Gerald 
Rogers, does not operate any motor coach or other ground 
transportation service. (App. 1, 7.) Because RJR does not engage in 
interstate transportation, RJR is not subject to the Board's 
jurisdiction, see 49 U.S.C. 13501, and the acquisition of RJR is not 
subject to the Board's acquisition authority, see 49 U.S.C. 14303.
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    Under 49 U.S.C. 4303(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. ARA has submitted the information 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), see 49 
CFR 1182.2(a)(7), and a jurisdictional statement under 49 U.S.C. 
14303(g) that the aggregate gross operating revenues of the ARA 
Affiliated Carriers, First Class, and Sierra exceeded $2 million during 
the 12-month period immediately preceding the filing of the 
application, see 49 CFR 1182.2(a)(5).
    ARA asserts that the proposed transaction is not expected to have a 
material, detrimental impact on the adequacy of transportation services 
available to the public. (Appl. 8.) ARA states that it anticipates that 
services to the public will be improved by using the business and 
financial management skills of Tensile, as well as its capital, to 
enhance and make operations more efficient for First Class and Sierra 
in their respective marketplaces, thereby ensuring the continued 
availability of adequate transportation service for the public. (Id. at 
8, 11.) ARA further states that the continued use of the assets and 
work force of the Sellers will help maintain a strong competitive bus 
presence in the eastern Texas area; that the proposed transaction 
includes the right to use the ``First Class'' and ``Sierra'' names 
post-closing; and that due to these strong brand names, ARA may also 
seek approval from the FMCSA to change its name to more closely 
resemble First Class and/or Sierra. (Id. at 8-9.)
    ARA claims that neither competition nor the public interest will be 
adversely affected by the proposed transaction. (Id. at 9-11.) ARA 
asserts that competition is keen in the markets in which First Class 
operates (i.e., passenger group charter motor coach and shuttle 
services in the Houston area, including charter transportation between 
Houston and various Louisiana casinos, and weekday park-and-ride 
commuter services between The Woodlands and points in Houston). (Id. at 
10.) Specifically, ARA states that the competition in the charter and 
shuttle services marketplaces consists of a large number of 
competitors, ranging from small charter operators to very large 
corporate charter organizations. ARA also states that special licensing 
is required to provide direct service to casinos located in Louisiana, 
and that at least two other carriers operating from within the Houston 
area have these special permits.\7\ (Id.) According to ARA, the 
marketplace of Sierra, like First Class, is primarily passenger group 
charter motor coach and shuttle services in the Houston area. ARA 
explains that in many instances, Sierra's marketplace is nearly 
identical to the marketplace of First Class because Sierra often 
operates under subcontract with First Class, including charter 
transportation between Houston and Louisiana casinos and weekday park-
and-ride commuter services between The Woodlands and Houston. (Id. at 
10-11.) Additionally, ARA states that there is little, if any, overlap 
of market areas served by First Class and Sierra with those served the 
ARA Affiliated Carriers. (Id. at 11.)
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    \7\ ARA also notes that the distance between Houston and these 
casinos is short enough that people may elect to drive themselves 
rather than use a bus service. (Appl. 10.)
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    ARA states that there are no significant fixed charges associated 
with the proposed transaction. (Id. at 9.) Regarding the interests of 
employees, ARA claims that the transaction will not have a material 
impact on employees or labor conditions, nor does ARA anticipate a 
measurable reduction in force or changes in compensation levels or 
benefits. (Id.) ARA states, however, that staffing redundancies could 
result in limited downsizing of back-office or managerial-level 
personnel. (Id.)
    The Board finds that the acquisition as proposed in the application 
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 at www.stb.gov.
    It is ordered:
    1. The proposed transaction is approved and authorized, 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 December 17, 2019, unless opposing 
comments are filed by December 16, 2019.
    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: October 28, 2019.

    By the Board, Board Members Begeman, Fuchs, and Oberman.
Brendetta Jones,
Clearance Clerk.
[FR Doc. 2019-23901 Filed 10-31-19; 8:45 am]
 BILLING CODE 4915-01-P