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In re Carey Transportation, Inc.

50 Bankr. 203 (1985)

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In re Carey Transportation, Inc.

United States Bankruptcy Court for the Southern District of New York
50 Bankr. 203 (1985)

  • Written by Tammy Boggs, JD

Facts

Carey Transportation, Inc. (Carey) operated bus service between New York City and two New York airports. Carey maintained collective-bargaining agreements (together, CBA) with a bus drivers’ union (the union). Carey suffered from financial difficulties and high operating costs due primarily to the terms of its CBA. Carey had also lost riders following a union strike and had never fully regained the ridership. Given Carey’s current cash flow, it anticipated that vendors would stop providing services within 30 days. Carey filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code. Pre- and post-petition, Carey negotiated with the union and implemented across-the-board cost-saving measures. Carey presented a proposal to the union to modify the terms of the CBA, which would generally result in reduced employee wages and benefits. The union rejected the proposal, and Carey filed an application in bankruptcy court to reject the CBA. The parties continued to exchange proposals and information, but the union would not agree to Carey’s proposed modifications. In bankruptcy court, Carey presented unrebutted financial evidence and testimony to support its application.

Rule of Law

Issue

Holding and Reasoning (Lifland, J.)

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