Greyhound files reorganization plan

November 20, 1990|By New York Times News Service

DALLAS -- Nearly six months after the only nationwide passenger-bus system entered federal bankruptcy protection during a bitter drivers' strike, Greyhound Lines Inc. filed a financial reorganization plan yesterday that calls for the company to repay much of what it owes its largest creditors.

The plan would take all equity away from the current owners, including the senior executives who spent $350 million in 1987 to buy Greyhound and a large piece of the Continental Trailways system.

Under the plan, unsecured creditors would receive 9.5 million of10 million new common shares that would be publicly traded. They would also get $165 million in new notes yielding 10 percent.

The company's bank debt, real estate mortgages and bus leases would be repaid in full.

Fred G. Currey, Greyhound's chairman and chief executive who led the buyout financed by high-yield debt, and other senior executives would retain their posts and possibly get future stock awards equal to25 percent of the company after it emerges from bankruptcy.

Also, 5 percent of the new stock would be contributed to a fund for all non-management employees.

The plan was filed yesterday afternoon in federal court in Corpus Christi, Texas. Creditor groups may now file opposing plans of reorganization.

Greyhound is operating with non-union drivers, and the company said October revenues this year were 90 percent of what they were in October last year. In the first nine months of 1990, the company said, it lost $105 million on $475 million in revenue.

The Amalgamated Transit Union, which led more than 6,000 drivers on a strike against Greyhound March 2, is seeking millions of dollars in back pay for what it asserted was Greyhound's unlawful labor practices before and during the early days of the strike.

The National Labor Relations Board ruled last spring that the back-pay complaint was valid. Greyhound said in yesterday's filing that it would continue to fight the claim, but that if it was ordered to pay, the amount should not exceed $40 million.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.