Bus Carrier Coach Hits Judicial Roadblock on Way to Auction (2)

An auction of bus company Coach USA hit a roadblock when a federal judge rejected a financing package and related sale proposal for the bankrupt owner of the Megabus brand and commuter lines connecting New York and New Jersey.

US Bankruptcy Judge Mary Walrath sided with lower-ranking creditors, who accused the bus company’s lenders, led by Wells Fargo, of trying to get repaid by trampling the rights of lower-ranking, unsecured creditors.

“I have a serious concern about having any provision that would adversely affect those” rights, Walrath said Tuesday, referring to the ability of creditors to challenge Wells Fargo’s claim ...