Bankrupt Bus Company Sues 47 School Districts For “Breach of Contract” and Non-Payment
January 5, 2021, New York – ACME (affiliated companies Baumann & Sons Bus company), a school transportation bus company sues about 47 school districts on the North Shore, claiming that the districts ceased to pay ACME when schools were closed due to the COVID-19 pandemic and forced it into bankruptcy.
According to the papers filed with the court, the school districts contracted ACME to provide student transportation services for the 2019-2020 school year under a written transportation contract. However, later it suspended all transport services of ACME. ACME has now initiated lawsuits to recover more than $20 million due under the contract from the Defendant schools. According to ACME, it had overhead operational costs to maintain its infrastructure and labor force so it can re-commence transportation.
ACME has filed these lawsuits under 11 U.S.C. § 502(d), common law claims of “breach of contract,” and unjust enrichment and is seeking to recover the damages that include the districts’ remaining balances for that year. ACME argues that the contract was for the entire school year, was tied to the school calendar, and contained no provision that authorized the school district to suspend all performance of ACME’s student transportation services without compensation, irrespective of a State-wide school closure caused by a pandemic or by the School District’s direction.