The company responsible for multiple intercity bus routes serving Madison, including the well-known Van Galder and Megabus services, recently filed for voluntary bankruptcy, according to the Wisconsin State Journal. Despite this development, passengers are not expected to experience immediate changes to their travel routes.
Coach USA, which operates the Van Galder and Megabus routes connecting Madison with cities such as Chicago, Minneapolis, Milwaukee, Green Bay, La Crosse, and Oshkosh, filed for Chapter 11 bankruptcy on June 11 in Delaware. The filing comes after a significant pandemic-related downturn, which severely impacted the company’s ability to manage the debt incurred during its $270 million acquisition by Variant Equity Advisors in 2019.
Court documents revealed that the COVID-19 pandemic caused bus ridership to plummet by 90% from 2019 to 2020. Although there was some recovery, last year’s ridership levels were still only 45% of pre-pandemic figures.
Coach USA, the largest privately owned bus company in the United States, operates across 27 locations in the U.S. and Canada, employing 2,700 people and managing 2,070 buses.
As part of the bankruptcy proceedings, Coach USA has structured three sales agreements. Under one agreement, a subsidiary of private investor Renco Group will acquire Van Galder, Wisconsin Coach, Megabus, and nine other bus lines. Avalon Transportation and ABC Buses are set to take over additional routes and assets. These agreements cover 16 of Coach USA’s 25 lines of business, but the company noted that higher bidders could also purchase the assets.
Entering Chapter 11, Coach USA holds $197.8 million in debt, including $37 million from a federal pandemic relief loan, alongside at least $134 million in other unpaid obligations.
