NEW YORK, June 12 (Reuters) - Coach USA, the operator of

Megabus and other commuter bus lines in the U.S. and Canada,

filed for bankruptcy protection in Delaware late Tuesday,

seeking to sell its assets and shed debt incurred in an

ill-timed 2019 private equity buyout.

Coach, the largest privately-owned bus company in the U.S.,

was acquired by private equity firm Variant Equity Advisors for

$270 million, mostly using debt that is still on the company's

books.

Coach quickly ran into trouble servicing its debt, as the

COVID-19 pandemic caused bus ridership to decline by 90% from

2019 to 2020, according to documents filed in Wilmington,

Delaware bankruptcy court.

While ridership levels have rebounded somewhat since the

lows of 2020, they were still only 45% of pre-pandemic levels in

2023, and Coach has faced higher interest rates and increased

costs for basic needs like employee retention and fuel, Coach

said in its court filings.

Coach CEO Derrick Waters said that buses will continue to

run as normal during the company's bankruptcy.

"Our top priority remains safely carrying the millions of

passengers who choose our buses each year and working closely

with our valued contract customers and transportation agency

partners," Waters said in a statement.

Coach entered Chapter 11 with $197.8 million in debt,

including $37 million due on a pandemic relief loan under the

Coronavirus Aid Relief & Economic Security (CARES) Act, and at

least $134 million in other unpaid obligations, including trade

debts.

Coach USA operates in 27 locations in the U.S. and Canada,

with 2,700 employees and 2,070 buses operating. The company

operates several other bus brands in addition to Coach,

including Megabus, Dillon's Bus Company, and Go Van Galder.

Coach entered bankruptcy with three sale agreements in

place, each of which is subject to higher and better offers.

Those sale agreements cover 16 of Coach's 25 business lines, and

they would preserve jobs for about 2,100 Coach employees,

according to court documents.

Renco Group, a private investment company, would acquire the

majority of Coach's assets in exchange for taking on $130

million of company debt and certain union contracts. Avalon

Transportation would buy bus lines in Atlanta, Georgia and

Western states, as well as specialized tour bus divisions

operated by Coach, for $14.8 million, and ABC Buses would buy a

fleet of 143 double-decker buses for $2.3 million, according to

court documents.