By Stephanie Gleason
Although it entered bankruptcy predicting it could have to
liquidate, New York City bus company Hoyt Transportation Corp. says
is ready to emerge from bankruptcy after "a highly successful
reorganization case," during which it restarted operations and
rehired 350 employees.
Hoyt filed its bankruptcy-exit plan Monday, saying that it has
paid down its senior lender during the course of its case. The less
than $500,000 balance it still owes Santander Bank is now due in
November, and Hoyt will continue making $63,500 monthly payments to
Santander until then.
Unsecured creditors are being paid in full and three unresolved
personal injury claims will be able to proceed against Hoyt's
insurance only. Equity stakes are remaining in tact, meaning Hoyt
will continue to be owned equally by Joseph Termini Jr., Karen
Salpas and Chris Termini.
Hoyt filed for Chapter 11 bankruptcy in July 2013 amid a union
rule change implemented by then-Mayor Michael Bloomberg, which Hoyt
said put it at a competitive disadvantage and caused it lose all of
its school bus routes during the competitive bidding process.
Without any routes, Hoyt shut down operations and expressed concern
about its ability to get the business going again.
However, the change hurt other bus companies as well, including
the much-larger Atlantic Express Transportation Co. Atlantic had
managed to hang on to most of its routes but was no longer able to
operate profitably. Facing a liquidity crisis, Atlantic filed for
bankruptcy in November 2013 and began selling its assets, which
included school bus routes across the U.S.
During an auction for Atlantic's assets, Hoyt bid on and won 208
of Atlantic's New York bus routes.
Subsequently, Hoyt was also able to strike a deal with its
union, Local 1181 of the Amalgamated Transit Union, which brought
its labor costs in line while also providing $2.2 million in back
pay to employees for March and June of 2013.
Approval of its bankruptcy-exit plan is the last step in closing
Hoyt's Chapter 11 case. A hearing to review the plan hasn't been
scheduled yet.
Write to Stephanie Gleason at stephanie.gleason@wsj.com
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