Coach USA, the parent company of the Megabus brand and several commuter bus lines connecting New York and New Jersey, filed for Chapter 11 bankruptcy on Wednesday. The company, which owes between 100 and 500 million to creditors, made the filing in Wilmington, Delaware.
The COVID-19 pandemic dealt a severe blow to Coach USA, causing commuter ridership to plummet by 90% in 2020. Although ridership recovered somewhat, it remained at only 45% of pre-pandemic levels in 2022. This, combined with increasing costs for fuel, insurance, and labor, prompted management to explore a potential sale of the company.
To fund its restructuring efforts and maintain operations during the bankruptcy process, Coach USA is borrowing $20 million. The company stressed that it will continue to work closely with vendors, business partners, and transportation agencies, paying them in full for goods and services provided after the filing date.
CEO Derrick Waters emphasized that Coach USA’s top priority is to safely transport millions of passengers each year and maintain strong relationships with contract customers and transportation agency partners. He expressed appreciation for the dedication of the company’s employees in prioritizing safety and serving customers and communities.
Coach USA, purchased by Variant Equity Advisors in April 2019, will use the court-supervised process to reorganize its debt while continuing to operate. The $20 million financing commitment is subject to court approval and is critical to meeting the company’s obligations throughout the sale process.
As Coach USA navigates this challenging period, its focus remains on providing reliable transportation services to its customers and working towards a successful restructuring.
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