Busing company closes

Bob Shemeligian

Wednesday, May 28, 1997 | 10:48 a.m.

Ray & Ross Transport, the largest minority-owned transportation company in Southern Nevada, has ceased operations because its insurance company refused to continue coverage.

Following a hearing in U.S. Bankruptcy Court before Judge Clive Jones Tuesday, officials from the charter bus company said they could be insured again within a few days.

"I have another insurance company lined up," said Elgin Simpson, the company's chief operating officer. "I just hope there's time to complete the deal."

Attorneys for 900 Capital Services, the company's largest creditor, explained at Tuesday's hearing that every day the company does not operate means a loss of revenue needed to make lease payments on most of the 33 buses and to pay other expenses.

There are also 60 employees who are -- at least temporarily -- out of work.

"I'm thinking about them," said Rod Jean, attorney for 900 Capital Services.

So is Simpson.

"This is a big loss to the community, because most of the people who work for Ray & Ross live in this community," Simpson said. "We want to get these people working again and get our clients' serviced."

But from the testimony at Tuesday's bankruptcy hearing, that will not be an easy task.

Deborah Reperowitz, attorney for Lancer Insurance Co., the carrier's long-time insurer, said, "There is concern about who is at the helm of this company."

The Public Service Commission in January began hearings on whether to close Ray & Ross after allegations of violations of state laws were uncovered by the PSC's enforcement branch.

Also in January, 900 Capital petitioned for a court appointed receiver, noting that the company "is insolvent."

A judge then appointed George Swarts, a Las Vegas certified public accountant as receiver, who soon afterward filed for Chapter 11 Bankruptcy protection for the company.

Throughout Tuesday's bankruptcy hearing, attorneys for 900 Capital, which is owed about $5 million by Ray & Ross, pledged to loan the company money to pay insurance and lease costs for buses in order to keep the company going.

But attorneys for smaller creditors, who apparently have given up on Ray & Ross, told Jones that if the company does not obtain insurance, they would be back in court within days seeking an order to dissolve the company and allow the creditors to confiscate the buses.

Jones continued the bankruptcy hearing until 10 a.m. Monday.

"If there is no insurance by that time, it's likely that those creditors will be able to get their buses," said Aviva Gordon, attorney for the receiver.