[Federal Register Volume 62, Number 163 (Friday, August 22, 1997)]
[Notices]
[Pages 44748-44749]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-22329]
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DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[STB Finance Docket No. 33435]
K. Earl Durden, Rail Management & Consulting Corporation, and
Rail Partners, L.P.; Acquisition of Control Exemption; Pennington
Railroad, Inc
K. Earl Durden (Durden), Rail Management & Consulting Corporation
(RMCC), and Rail Partners, L.P. (Partners) 1 (collectively,
applicants), have filed a notice of exemption 2 to acquire
control of Pennington Railroad, Inc. (Pennington), a noncarrier.
According to applicants, before the closing of the transaction,
Pennington's parent company, James River Paper Company, Inc. (JRP) will
merge Pennington into the Meridian & Bigbee Railroad Company
(Meridian), a Class III rail carrier that is also owned and
[[Page 44749]]
controlled by JRP. Upon consummation of the transaction, Pennington
will remain as the surviving corporation and Pennington will therefore
become a Class III rail carrier. Pennington will then merge into M&B
Railroad, L.L.C. (MBRR), a noncarrier entity wholly owned and
controlled by applicants,3 and applicants will thereby
assume control of Pennington. Applicants state that the transaction was
expected to be consummated on or about July 31, 1997.
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\1\ Durden, RMCC, and Partners control 12 Class III rail
carriers located in Alabama, Arizona, Arkansas, Florida, Georgia,
Kentucky, North Carolina, Tennessee, Texas, and Wisconsin. They are:
Atlantic & Western Railway, L.P.; The Bay Line Railroad, L.L.C.;
Copper Basin Railway; East Tennessee Railway, L.P.; Galveston
Railroad, L.P.; Georgia Central Railway, L.P.; KWT Railway, Inc.;
Little Rock & Western Railway, L.P.; Tomahawk Railway, L.P.;
Valdosta Railway, L.P.; Western Kentucky Railway, L.L.C.; and
Wilmington Terminal Railroad, L.P. These rail carriers are referred
to as the RMCC Rail Group.
\2\ Concurrent with the filing of the notice of exemption,
applicants filed, pursuant to 49 CFR 1117.1, a petition to file
under seal the Agreement of Merger in this proceeding. By decision
served August 18, 1997, the Board granted applicants' request.
\3\ According to applicants, the corporate merger of Meridian
into Pennington, followed by the corporate merger of Pennington into
MBRR, will result in MBRR's complete assumption of Meridian's
railroad operations and corporate obligations. Applicants also state
that MBRR, as the corporate successor of Meridian, will conduct
Meridian's railroad operations without material change.
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Applicants state that: (1) The merged MBRR will not connect with
any other railroad in the RMCC Rail Group; (2) MBRR's merger with
Pennington is not part of a series of anticipated transactions that
would connect the railroads of the RMCC Rail Group with each other; and
(3) the transaction does not involve a Class I carrier. The transaction
therefore is exempt from the prior approval requirements of 49 U.S.C.
11323. See 49 CFR 1180.2(d)(2). The purpose of the transaction is to
transfer ownership of, and responsibility for, Pennington from JRP to
applicants, thereby enabling JRP to concentrate on its core business
operations, without distractions related to its single railroad
operation, while allowing applicants to expand their railroad
operations into a new part of the country. MBRR will continue to handle
freight for customers Meridian previously served, without material
changes in the level or quality of transportation service provided.
Under 49 U.S.C. 10502 (g), the Board may not use its exemption
authority to relieve a rail carrier of its statutory obligation to
protect the interests of its employees. Section 11326 (c), however,
does not provide for labor protection for transactions under sections
11324-25 that involve only Class III rail carriers. Because this
transaction involves Class III rail carriers only, the Board, under
statute, may not impose labor protective conditions for this
transaction.4
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\4\ Applicants note, however, that MBRR is inheriting, and
affirmatively assuming, all of Meridian's collective bargaining
agreements with the labor organizations that represent its
employees, and MBRR will continue the employment of all of
Meridian's employees covered by such collective bargaining
agreements.
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If the verified notice contains false or misleading information,
the exemption is void ab initio. Petitions to reopen the proceeding to
revoke the exemption under 49 U.S.C. 10502(d) may be filed at any time.
The filing of a petition to reopen will not stay the transaction. An
original and 10 copies of all pleadings, referring to STB Finance
Docket No. 33435, must be filed with the Surface Transportation Board,
Office of the Secretary, Case Control Unit, 1925 K Street, N.W.,
Washington, DC 20423-0001. In addition, a copy of each pleading must be
served on: Donald G. Avery, Slover & Loftus, 1224 Seventeenth Street,
N.W., Washington, DC 20036.
Decided: August 18, 1997.
By the Board, David M. Konschnik, Director, Office of
Proceedings.
Vernon A. Williams,
Secretary.
[FR Doc. 97-22329 Filed 8-21-97; 8:45 am]
BILLING CODE 4915-00-P
