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Atlantic Express files for bankruptcy

The school bus contractor cites a union battle, bidding issues and challenging earnings as key factors. The company will continue normal operations during the Chapter 11 process.

Thomas McMahon
Thomas McMahonExecutive Editor
November 5, 2013
Atlantic Express files for bankruptcy

Atlantic Express has operations in New York, Massachusetts, California and Pennsylvania, with a total of more than 5,000 school buses.

2 min to read


STATEN ISLAND, N.Y. — A union battle, bidding issues and challenging earnings are key factors in school bus contractor Atlantic Express Transportation Corp.’s filing for bankruptcy, company officials said on Monday.

With a fleet of more than 5,000 school buses, Atlantic Express is the fourth-largest contractor in North America. The company has operations in New York, Massachusetts, California and Pennsylvania.

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Atlantic Express and its subsidiaries filed voluntary petitions for debt relief under Chapter 11 of the U.S. Bankruptcy Code. Officials said that during the Chapter 11 process, the company will continue normal operations and will “remain committed to providing its customers and passengers with safe, reliable and timely student and commuter transportation service.“

Officials said that Atlantic Express intends to use the Chapter 11 process to explore the availability of additional debt or equity financing, market its assets for sale, and continue what they described as “challenging labor negotiations” for a new collective bargaining agreement with Local 1181-1061, Amalgamated Transit Union, AFL-CIO.

“Quite simply, our current business model in our largest market, New York City, is not sustainable as union labor costs and operating expenses have severely hindered our ability to remain competitive and meet our financial obligations,” said David Carpenter, president and CEO of Atlantic Express. “Following a lengthy review process, and with the assistance of independent financial and legal advisors, our board of directors determined that a court-supervised process is the only feasible course of action.”

Atlantic Express announced Carpenter’s appointment as president and CEO this summer. He succeeded Domenic Gatto, the company’s founder and long-serving CEO and president, who last year announced his plans to retire.

Atlantic Express has filed a series of customary motions in bankruptcy court seeking to ensure the continuation of normal operations. This includes requesting court approval for debtor-in-possession financing and the use of cash collateral, the continuation of its cash management system and other business operations without interruption, and the payment of employee wages and benefits.

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Also, Atlantic Express has filed a motion seeking approval of bidding procedures and authorization to sell some or all of its assets in December if the company is unable to reach an agreement with Local 1181 on a new collective bargaining agreement and to obtain additional financing.

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