Certain of the transferor-applicants in the Evanston and Allen cases were required to keep and file certain data with us with respect to their operating costs. This was not required of the transferorapplicants in the Johnston case, and it does not appear that the trans. feror-applicants here involved will transport a sufficiently large amount of traffic for Allied to warrant their inclusion at this time among those required to file such information. The condition will not he reimposed, but our jurisdiction in this connection is reserved. FINDINGS We find: (1) That purchase by Allied Van Lines, Inc., of the household goods operating rights of Albrent Freight and Storage Corp., Brown's Storage Co., Inc., The Marria Transfer Company, and Peters Transfer & Storage Company, upon the terms and conditions above set forth, which terms and conditions are found to be just and reasonable, are transactions within the scope of section 5 (2) (a), and will be consistent with the public interest; and that, if the transactions are consummated, Allied Van Lines, Inc., will be entitled to a certificate covering the right to transport household goods granted in Nos. MC-7807, MC-38675, MC-62019, and MC-23552, herein authorized to be unified with rights confirmed in it, with duplications eliminated; provided, however, that, if the authority herein granted is exercised, (a) Allied Van Lines, Inc., shall immediately write off the amount assigned to its "Other Intangible Property" account as a result of each of the proposed transactions, such write-off to be accomplished in the manner to be determined upon submission of the journal entries proposed to record the transactions; and (b) that, upon consummation of any of the instant transactions, neither Allied Van Lines, Inc., nor its agents, shall thereafter enter into any arrangement with any carrier of household goods for the augmentation of the former's equipment, except under terms whereby the equipment shall be under the exclusive dominion and control of Allied Van Lines, Inc., for the entire period that its traffic is being transported in said equipment under its operating rights, and, particularly, that one of its regular employees or a regular employee of one of its hauling agents shall control and operate said equipment during that entire period. An appropriate order will be entered. 50 M. C. C. No. MC-F-3814 AMERICAN BUSLINES, INC.-CONTROL; BURLINGTON LINES Submitted July 7, 1948. Decided July 30, 1948 Acquisition by Burlington Transportation Company of control of Gibson Lines through purchase of capital stock, and by American Buslines, Inc., through its ownership of the capital stock of Burlington Transportation Company. approved and authorized, subject to condition. Wyman C. Knapp and Robert E. Gocke for applicants. REPORT OF THE COMMISSION DIVISION 4, COMMISSIONERS LEE, MAHAFFIE, AND MILLER BY DIVISION 4: The Burlington Transportation Company, of Chicago, Ill., herein called Burlington, by application filed April 30, 1948, seeks authority under section 5 of the Interstate Commerce Act to acquire control of Gibson Lines, of Sacramento, Calif., through purchase of its entire outstanding capital stock. American Buslines, Inc., of Chicago, herein called American, which controls Burlington through entire stock ownership, joins in the application and seeks concurrent authority under the same section to acquire control of Gibson Lines through the proposed transaction. Hearing has been held, at which the parties agreed to the omission of an examiner's proposed report. Applicants operate more than 20 motor vehicles. The corporate history and affiliations of Burlington and American, the operations of their affiliates, and their own operations, in interstate or foreign commerce, as motorbus common carriers, are detailed in Burlington Transp. Co.-Control-Muscatine, D. & C. Bus Co., 45 M. C. C. 703, and cases cited therein. As of October 4, 1947, the outstanding capital stock of American was owned in varying amounts by 212 common and 37 preferred stockholders. The Chicago Corporation, of Chicago, owns the largest block of stock, consisting of 20.3 percent of the common and 73.2 percent of the preferred shares, and is in a position to elect not more than 3 members of American's board 50 M. C. C. of 9 directors, of which 2 represent preferred stockholders. On similar facts in the case cited, we concluded that, in the absence of an agreement between any group of American's stockholders which would warrant the belief that control of American is or could be exercised by such group, it was unnecessary for any person or persons to become parties applicant for control authority as the real parties in interest within the meaning of the principle in Refiners Transport & Term. Corp.Purchase-Marshall, 39 M. C. C. 271. A similar conclusion is warranted here. Burlington operates in interstate or foreign commerce as a motor common carrier of passengers, pursuant to certificates issued in No. MC-2180 and various subnumbered proceedings, over regular routes extending from Chicago and St. Louis, Mo., on the east, to Los Angeles and San Francisco, on the west, generally via Omaha, Nebr., Cheyenne, Wyo., and Salt Lake City, Utah. It owns all the capital stock of Muscatine, Davenport and Clinton Bus Company and one-half of the capital stock of Denver, Colorado Springs and Pueblo Motor Way, Inc., and the latter company and Burlington each owns one-third of the capital stock of Denver, Salt Lake and Pacific Stages, Inc. The operations of the subsidiary companies, in interstate or foreign commerce, as motor common carriers of passengers, are not directly pertinent to the instant transaction. American conducts operations similar to those of Burlington, under certificates issued in Nos. MC-2890 and MC-2890 (Sub-No. 5), and under operating rights acquired pursuant to authority granted in several section 5 proceedings, over regular routes extending from New York, N. Y., Philadelphia, Pa., and Washington, D. C., on the east, to Los Angeles and San Francisco, on the west, generally via Pittsburgh, Pa., Chicago, St. Louis, Dallas and El Paso, Tex., and Phoenix, Ariz. It has pending several applications under section 207 for authority to extend its operations, and another application under section 5 for authority to purchase passenger operating rights between San Francisco and Portland, Oreg., for $26,000. Gibson Lines, a California corporation, has outstanding 876 shares of common capital stock 2 owned 2 shares each by Beverly and Mary B. Gibson and 218 shares each by Beverly C., George T., and Curtis C. Gibson, and Annabelle Gibson Nosler. On March 18, 1947, in No. MC-57729, a certificate was issued to Gibson Lines authorizing operations, in interstate or foreign commerce, as a motor common carrier of passengers and their baggage, and express in the same vehicle with 1 No. MC-F-3780, American Buslines, Inc.--Purchase-Dollar Lines. The total issued capital stock is 931 shares, but 55 shares are held as treasury stock. passengers, over numerous regular routes, almost wholly within California, extending from Sacramento, Calif., as the hub, northward to Chico and Chico Basic Flying School, Calif., northeastward to Reno, Nev., southward to Stockton, Calif., and southwestward to Fairfield, Oakland, and San Francisco, Calif. Service is authorized to and from all intermediate points. The routes of Gibson Lines and Burlington coincide between Reno and Sacramento, 140 miles, and between Oakland and San Francisco, 11 miles. Gibson Lines holds intrastate operating authority over all its routes within California, whereas Burlington has no such authority from that State. The parties propose eventually to merge the operations of Gibson Lines with those of Burlington. Under an agreement dated February 24, 1948, between Burlington and the stockholders of Gibson Lines, the former would purchase, subject to approval of regulatory bodies having jurisdiction, the 876 outstanding shares of Gibson Lines' capital stock for $490,000, plus interest at 4 percent per annum on $480,000 from February 1, 1948, the designated date of sale, to the date of consummation, payable on the latter date. Of the purchase price, $10,000 was paid upon execution of the agreement. Of the remainder, Burlington proposes to pay $330,000 from current funds on the consummation date and to issue to the sellers its promissory note in the principal amount of $150,000, bearing interest at 5 percent per annum, secured by 475 shares of the stock to be acquired, and payable on or before February 1, 1949. No authority under section 214 of the act to issue this note is sought. It appears that issuance of such a note would require our prior authorization under that section. Nothing herein is to be construed as authorizing the issuance of said note, or any other securities, if our authorization thereof is required under section 214, or as authorizing consummation of the transaction prior to obtaining any required authorization under section 214. The agreement recites that the purchase price is based on the financial condition of Gibson Lines as reflected by its balance sheet as of December 31, 1947. It provides that Burlington shall have the benefit of, or bear the losses attendant upon, the operations after that date; that the sellers shall deliver to Burlington the 876 shares of stock simultaneously with the latter's payment of $330,000, plus 4 percent interest, and the note for $150,000; and that on the consummation date, the sellers shall, if requested by Burlington, present it with the resignations of all officers and directors of Gibson Lines. It is further provided that Gibson Lines shall not, after the execution of the agreement, declare any dividend, change its capitalization, or sell any of its operating authority or tangible assets exceeding a value of $500; that it shall not make any capital expenditure in excess of $500 without the consent of Burlington, except that it may arrange for the financing of the purchase of 10 busses now on order upon their delivery; and it is represented that no law suits are pending against Gibson Lines, except 8 listed in the agreement, aggregating in excess of $100,000. As of June 14, 1948, all but 5, aggregating $75,250 had been settled. No liability is recorded on Gibson Lines balance sheet account of these suits, but with respect to which it is protected by public liability insurance. Burlington agrees, upon acquisition of the stock, to elect 1 of the sellers as a director of Gibson Lines to serve only until the promissory note and interest thereon are paid. As part of the consideration for the agreement, Burlington agrees to lease, for a term of 10 years from date of consummation of the stock purchase, at a rental of $2,375 per month, according to the terms of a companion undated lease agreement to be entered into between it and 4 of the 6 sellers, certain terminal facilities in Sacramento owned by the Gibson Terminal Investment Company and now being used by Gibson Lines. Gibson Lines, Burlington, and West Coast Bus Lines Limited, at present operate into this terminal. Certain of the facilities are subleased for approximately $4,000 per month at the present time, which would accrue to Burlington upon execution of the lease. Burlington's balance sheet as of April 30, 1948, shows assets aggregating $7,152,041, consisting of: Current assets $1,871,637, including cash $154,990, accounts receivable $773,999, and receivables from associated companies (American) $217,000; carrier operating property, less depreciation, $494,728; intangible property, less amortization, $299,459; investment securities and advances $308,521; and deferred debits $177,696. Liabilities were: Current liabilities $1,083,345, principally accounts payable $491,513, and taxes accrued $196,250; equipment obligations $1,984,470; other long-term obligations $349,634; deferred credits $3,500; reserves $32,284; capital stock $916,600; and surplus, unearned $1,037,683, and earned $1,744,525. Its income statements for 1946, 1947, and the first 4 months of 1948, show from bus operations, after provision for income taxes, net income of $952,186, net income of $472,748, and a deficit of $247,561, respectively. The indicated deficit is attributed to the normal decline in bus travel during the early months of each year. A profit is anticipated for operations during the entire year of 1948. |