Longtime bus firm to close its doors

Bob Shemeligian

Thursday, July 24, 1997 | 11:04 a.m.

After nearly a quarter century of operation, Ray & Ross Transport, the largest minority-owned transportation company in Southern Nevada, will soon cease operations.

"It's sad," Chief Operating Officer Elgin Simpson said Wednesday, two days after U.S. Bankruptcy Court Judge Clive Jones approved a sale of the company for $1.35 million to a consortium of Las Vegas business owners led by Milton Schwartz, owner of Checker Cab Co.

Other principals in the purchase include David Willden, owner of Willden's Pride Dodge; Peter Eliades, owner of the Olympic Garden topless club, and his brother Harry Eliades, and Howard Dudley, a partner with the other principals in the ownership of Fleet Delivery Service.

Pending approval by the state Public Service Commission, which regulates transportation companies, the sale is expected to forever close the doors of Ray and Ross's headquarters at 300 W. Owens Ave.

"It's too bad," said Simpson, who started at Ray & Ross as a bus driver when the business opened in 1974. "This operation has always been something for the community to look and point to as an example of a successful minority company."

The $1.35 million purchase price pays for only the state and federal licenses that allow Ray & Ross to operate, including the much valued PSC Certificate of Public Convenience and Necessity.

Because the principals have indicated they are not interested in renewing the Ray & Ross lease at the Owens Avenue location, the company is expected to close its doors within weeks.

Still up in the air is the fate of the 128 full- and part-time employees.

"We're doing everything we can to make sure that they will be absorbed by the new company," Simpson said.

Rod Jean, attorney for San Francisco-based 900 Capital Services, the bus company's largest creditor, said, "Ray & Ross will continue to operate through the turnover, but I am concerned for the welfare of those employees."

Because Ray & Ross is in bankruptcy, a joint application for PSC approval of the transfer of ownership is required by law.

Tony Sanchez, PSC assistant general counsel, explained that the application would be required to be submitted by both the new group of principals who have purchased the company and court-appointed receiver George Swarts, who filed for Chapter 11 bankruptcy protection for the company in February.

Sanchez said Swarts would continue to run the company until the PSC decides whether to approve the transfer.

That did not sit well with representatives of 900 Capital, who contend their company is owed $5.5 million by the beleaguered bus company.

Attorneys for 900 Capital on Friday filed a motion asking the court to block the sale, to remove Swarts as receiver and to replace him with Robert Apfelberg, a reorganization specialist with Commerce Partners, a company with offices in Los Angeles and Henderson.

"Over the past few months, (Swarts) and 900 Capital ... have had their difficulties working together to effectively reorganize the debtor," the motion states. "At present, the receiver believes the assets of the debtor should be sold for $1.35 million and 900 Capital believes the debtor can be reorganized."

Ironically, it was 900 Capital in January that petitioned for Swarts as receiver, noting that Ray & Ross was "insolvent."

Also at that time, the PSC began hearings on whether to close Ray & Ross after allegations of violations of state laws were uncovered by the PSC's enforcement branch.

Those hearings were suspended when Swarts filed for bankruptcy.

The latest motion by 900 Capital to block the sale and replace Swarts as receiver was rejected by the court.

"I think it's too bad, I really do," said Mark Cohn, general counsel for 900 Capital, who explained that in addition to the more than $5 million loaned to Ray & Ross before this year by his company, another $500,000 was loaned to the bus company during the bankruptcy to keep it going.

"That's money that was flushed down the toilet," said Cohn, adding that he was deeply disturbed with the sale of the company to the Las Vegas principals for the bargain-basement price of $1.35 million.

The motion stated that Ray & Ross had previously received "a serious offer" of about $3 million.

"What really troubles me is the negative momentum that has been built against the (bus) company and, frankly, against us," said Cohn, who explained that 900 Capital had a plan to keep Ray & Ross operating to give the employees the time to eventually purchase the company.

Ironically, 900 Capital could have blocked the sale on Monday by coming up with an additional $117,000 to keep Ray & Ross afloat, a sum requested in Bankruptcy Court by various other creditors.

But representatives of 900 Capital decided enough was enough.

"Suddenly, it became our job to sustain everything, and on demand," Cohn said. "It's too bad it turned out that way. There's a lot to be said for professionalism, which didn't exist in this case, and we're going to take that up at a different venue."

Neither Cathy Olendorff, attorney for the buyers, nor Swarts could be reached for comment on Wednesday.