Hoyt Ready to Exit Bankruptcy After Successful Restructuring

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 [e-mail]

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