The Justice Department announced yesterday it is seeking a delay of the request by a Greyhound bus lines affiliate to immediately begin operating Trailways Lines Inc.
The Justice Department asked the Interstate Commerce Commission to defer action on the request until the department determines whether Trailways qualifies as a "failing firm" under antitrust laws.
GLI Acquisition Co., affiliated with Greyhound, wants to begin operating Trailways immediately, pending an ICC decision on the companies' merger proposal.
Granting GLI Acquisition's request "would not only move the nation immediately from two national bus systems to one, but it would probably preclude" the ICC from restoring competition if it subsequently found a permanent merger would be anticompetitive, Justice said.
Greyhound Lines Inc. announced plans June 19 to buy Trailways for $80 million in a deal that, if approved by the government, would make it the only nationwide inter-city bus company.
The companies have said that Trailways, which has been struggling to keep operating, qualifies as a failing firm. Four years ago, the privately held Trailways sought to sell stock to the public, but was unable to attract investors. It also has failed to attract support of labor unions for an employe stock ownership plan and failed last year in efforts to attract a buyer.
Under the failing firm doctrine of antitrust law, which Justice says it is reviewing as it applies to Trailways, the company to be purchased must show that it will be unable to meet financial obligations with existing assets. It also must establish that no other firm representing less of a threat to competition is willing to buy the assets.
Justice "has just begun to receive relevant information on Trailways' financial condition'" and is in the process of assessing the correctness ofthe companies' allegations," a Justice spokesman said. The Justice Department made its filing with the ICC late Friday.