Greyhound May Be Forced Into Chapter 11 Filing : Transit: Bondholders turn to courts after talks collapse over forgiving debt. The company vows to fight the action.

A group of Greyhound Lines Inc.’s bondholders turned their backs on restructuring negotiations Thursday and asked a judge to force the country’s only national bus company into a bankruptcy reorganization.

Greyhound said the filing had no immediate impact on its operations or finances. The company said it does not plan to ask for bankruptcy protection itself and will fight the bondholders.

Greyhound has been struggling to negotiate new terms with its creditors. The involuntary Chapter 11 filing came as talks between the company and bondholders collapsed over how much of a stake the investors would get in return for forgiving the debt.

Bondholders want 55% of the company in return for wiping out $98.9 million of debt. The company has offered a 32% stake.

The petition was filed by the holders of about $24.9 million of Greyhound’s convertible subordinated debentures, or 25% of the total. Greyhound missed a $4.2-million debt payment to the bondholders Sept. 23, giving bondholders the ability to seek a bankruptcy filing.

The bondholders also asked to make the company pay off all the bonds.

A hearing was set for Dec. 2 in U.S. Bankruptcy Court in Dallas, where the petition was filed late Wednesday night.

Wilbur Ross of Rothschild Inc., Greyhound’s financial adviser, said the company will contest the filing.

“We do not feel that it’s in the best interest of any of the constituents, and so we will be trying to knock it out,” Ross said. “We think it’s a very unfortunate and very ill-tempered development, and we believe that it’s really just a negotiating ploy on their part to put pressure on us.”

But bondholder Chriss Street of Chriss Street & Co. of Corona del Mar, who listed a $100,000 claim against Greyhound and is one of the investors seeking its bankruptcy, said the only issue is money.

“It was apparent that negotiations had broken down, and I think this effort really comes from a groundswell of the subordinated debt holders who have concluded that an out-of-court resolution wasn’t possible in light of the company’s negotiating position,” he said. “We were dramatically apart.”

It was only three years ago that Greyhound emerged from Chapter 11 bankruptcy reorganization, prompted in June, 1990, by a drivers strike.

Greyhound was profitable in 1992 and 1993. But its losses have mounted as it grapples with heavy debt and dwindling passenger numbers, due partly to competition from low-cost airlines.

Greyhound shares fell 62.5 cents to $1.875 on the American Stock Exchange.