Megabus Canada et al., CCAA

Megabus Canada et al. (collectively, “Coach Canada”), Canadian entities within the larger Coach megabus group, had their US Chapter 11 proceedings recognized under Part IV of the CCAA on June 14.

The group has a history of almost a century. It provides ground passenger transportation across North America with operations in 25 business segments throughout the US and Canada, employing over 2,700 employees and utilizing a fleet of over 2,000 buses. 

Coach Canada represents approximately 9.7% of the group’s overall revenue and employs approximately 13.2% of the group’s workforce. Trentway-Wagar is the main operating entity in Canada.

The group suffered significantly as a result of the Covid 19 pandemic, having to cease operations completely for extended periods of time due to lockdowns and regulatory requirements. A much slower-than-anticipated recovery, together with a shift towards hybrid work environments, put further pressure on the group’s liquidity position.

The group engaged its prepetition lenders, Wells Fargo and MUFG National Bank, owed approximately $179.9 million, to evaluate all available options to preserve the group as a going concern.

Forbearance agreements were entered into and a sale process was conducted, resulting in three separate proposed sale transactions supported by stalking horse agreements for different segments of the group. The proposed stalking horse agreement with the Renco Group includes the business and assets of Coach Canada.

The Coach group intends to seek a bidding procedures order from the US Bankruptcy Court, with the stalking horse APAs serving as a baseline for an auction. If the order is granted, recognition will be sought from the Canadian Court.

A&M is the information officer.

Counsel is Bennett Jones for the companies, Norton Rose for the prepetition/DIP lenders, Osler for the information officer and Stikeman Elliott for the Renco Group.