[Federal Register Volume 62, Number 68 (Wednesday, April 9, 1997)]
[Notices]
[Pages 17280-17281]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-9205]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Maritime Administration
[Docket S-944]
Lykes Bros. Steamship Co., Inc.; Notice of Additional Application
for Written Permission Pursuant to Section 805(a) of the Merchant
Marine Act, 1936, As Amended
Lykes Bros. Steamship Co., Inc. (Lykes), by letter of April 4,
1997, requests further written permission, in addition to its March 14,
1997, request published on March 19, 1997 (62 FR 13209-11), and its
March 20, 1997 request published on March 25, 1997 (62 FR 14183),
pursuant to section 805(a) of the Merchant Marine Act, 1936, as amended
(Act), and Lykes' Operating-Differential Subsidy Agreement (ODSA),
Contract MA/MSB-451. The April 4, 1997 letter requests permission for
Lykes to become affiliated after the confirmation of its Chapter 11
plan of reorganization (Reorganization Plan), when it will emerge from
Chapter 11 as a reorganized entity (Reorganized Lykes) with Gilman
Financial Services Inc. (Gilman) through Gilman's wholly owned
subsidiary GFS Second Transportation Leasing, Inc. (GFST). Reorganized
Lykes will be 50% owned by GFST. Lykes' operating-differential subsidy
(ODS) is effective through December 31, 1997, for seven vessels. The
additional request involves another wholly owned Gilman subsidiary, GFS
Third Transportation Leasing, Inc., which is the Owner Participant in a
trust agreement under which Fleet Bank is the Owner Trustee and
documented owner of the vessel SEA-LAND NAVIGATOR, which is bareboat
chartered to and operated by Sea-Land Service, Inc. (Sea-Land). The
SEA-LAND NAVIGATOR, which was built with construction-differential
subsidy, operates in a mixed domestic/foreign trade, and carries cargo
between the United States Pacific Coast and Hawaii.
The ``affiliation'' giving rise to this request for permission will
be created as part of a restructuring under the supervision of the
United States Bankruptcy Court. Lykes believes that the operational
facts of this situation should be distinguished from the more common
section 805(a) situation in which an ODS contractor wishes to directly
or indirectly establish a domestic service. While Gilman, through GFS
Third Transportation Leasing, Inc., indirectly holds a beneficial
interest in the SEA-LAND NAVIGATOR, that vessel is bareboat chartered
to and operated by Sea-Land. Lykes states that Reorganized Lykes, as
the ODS contractor, has absolutely no affiliation with Sea-Land.
According to Lykes, nothing in the affiliation of Reorganized Lykes and
Gilman (and its subsidiaries) created by the reorganization will have
any effect on the operation or competitive status of the SEA-LAND
NAVIGATOR, and there will be no impact on any competitor of that
vessel. Lykes indicates that neither it nor Reorganized Lykes plans to
operate in the trade in which the SEA-LAND NAVIGATOR sails.
For the foregoing reasons, and in light of the complete operational
separation between Reorganized Lykes and the operator of the vessel in
which Gilman indirectly holds a beneficial interest and the short
remaining term of Lykes' ODS contract, Lykes requests that the
Secretary issue written permission pursuant to section 805(a) for
Reorganized Lykes to become affiliated with Gilman and its
subsidiaries. Lykes states that grant of the requested permission will
facilitate the consummation of the Reorganization Plan and accordingly
preserve U.S.-flag service and the employment of U.S. seamen. Lykes
respectfully requests that its application be given the most
expeditious possible consideration.
[[Page 17281]]
Notice is also given that Lykes has been authorized to be a party
to operating agreements under the Maritime Security Program (MSP)
Contract Nos. MA/MSP-21 through MA/MSP-23. Section 656 of the Act
provides that no contractor or related party shall receive MSP payments
during a period when it participates in a noncontiguous trade without
written permission. The SEA-LAND NAVIGATOR operates in the
noncontiguous trade to Hawaii. Sea-Land made application under section
656 for the operation of the SEA-LAND NAVIGATOR among others. A Gilman
subsidiary is the Owner Participant of the SEA-LAND NAVIGATOR. The
section 656 aspects are being addressed in Docket MSP-002.
The application may be inspected in the Office of the Secretary,
Maritime Administration. Any person, firm or corporation having any
interest (within the meaning of section 805(a)) in Lykes' request and
desiring to submit comments concerning the request must by 5:00 PM on
April 16, 1997, file written comments in triplicate with the Secretary,
Maritime Administration, together with petition for leave to intervene.
The petition shall state clearly and concisely the grounds of interest,
and the alleged facts relied on for relief.
If no petition for leave to intervene is received within the
specified time or if it is determined that petitions filed do not
demonstrate sufficient interest to warrant a hearing, the Maritime
Administration will take such actions as may be deemed appropriate.
In the event petitions regarding the relevant section 805(a) issues
are received from parties with standing to be heard, a hearing will be
held, the purpose of which will be to receive evidence under section
805(a) relative to whether the proposed operations (a) could result in
unfair competition to any person, firm, or corporation operating
exclusively in the coastwise or intercoastal service, or (b) would be
prejudicial to the objects and policy of the Act relative to domestic
trade operations.
(Catalog of Federal Domestic Assistance Program No. 20.805
(Operating-Differential Subsidy)).
Dated: April 7, 1997.
By order of the Maritime Administrator.
Joel C. Richard,
Secretary.
[FR Doc. 97-9205 Filed 4-8-97; 8:45 am]
BILLING CODE 9410-81-P
