[Federal Register Volume 77, Number 208 (Friday, October 26, 2012)]
[Notices]
[Pages 65446-65447]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-26371]
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DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[Docket No. FD 35684]
Iowa Pacific Holdings, LLC and Permian Basin Railways--Control
Exemption--Cape Rail, Inc. and Massachusetts Coastal Railroad, LLC
Iowa Pacific Holdings, LLC (Iowa Pacific) and its wholly owned
subsidiary, Permian Basin Railways (Permian), Cape Rail, Inc. (Cape),
P. Christopher Podgurski (Podgurski), Andrew Reardon (Reardon), and
Massachusetts Coastal Railroad, LLC (Mass Coastal) (collectively,
applicants) have filed a verified notice of exemption for Iowa Pacific
and Permian to acquire indirect control of Mass Coastal, a Class III
rail carrier, through Permian's acquisition of an 80% stock interest in
Cape, the parent company of Mass Coastal, from the two existing Cape
shareholders, Podgurski and Reardon.\1\ As a result of the proposed
transaction, Iowa Pacific and Permian will indirectly control Mass
Coastal. Podgurski and Reardon will continue to own the remaining 20%
of Cape's shares. Iowa
[[Page 65447]]
Pacific has created an independent voting trust to acquire and hold the
Cape shares, and to provide for control of Mass Coastal, until Board
approval is received through the notice of exemption procedure.\2\
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\1\ On October 12, 2012, applicants filed a motion for
protective order pursuant to 49 CFR 1104.14 to protect the exchange
of information by the parties in this proceeding. That motion will
be addressed in a separate decision.
\2\ On October 9, 2012, applicants submitted a copy of the
voting trust agreement to the Board for an informal, nonbinding
opinion asking whether the voting trust would sufficiently insulate
the applicants from unauthorized control of Cape and its
subsidiaries, pending approval or exemption of the subject
transaction by the Board. In a letter dated October 12, 2012, the
Director of the Office of Proceedings informed the applicants that
it is her informal opinion that the proposed voting trust agreement
would effectively insulate the applicants from unauthorized control
of Cape.
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Through Permian, Iowa Pacific currently controls indirectly the
following seven Class III rail carriers in the United States: Austin &
Northwestern Railroad Company, Inc. (operating as the Texas-New Mexico
Railroad), Chicago Terminal Railroad, Mount Hood Railroad, San Luis &
Rio Grande Railroad, Saratoga & North Creek Railway, the West Texas &
Lubbock Railway Company, and the Santa Cruz and Monterey Bay Railway
Company. In addition, Iowa Pacific directly controls the Rusk,
Palestine & Pacific Railroad. Cape currently owns Mass Coastal and Cape
Cod Central Railroad (Cape Cod), an intrastate passenger excursion
railroad.
Mass Coastal operates a network of about 100 miles of track and
trackage rights in southeastern Massachusetts and on Cape Cod.
Applicants state that the purpose of the transaction is to improve the
revenue base of Cape's two subsidiaries, Mass Coastal and Cape Cod,
through access to Iowa Pacific's greater freight and passenger
marketing resources, and to achieve economies of scale through
centralization of administrative functions.
Applicants state that they propose to consummate the transaction on
or about November 12, 2012. The earliest this transaction can be
consummated is November 11, 2012, the effective date of the exemption
(30 days after the verified notice was filed).
Applicants represent that: (1) The rail line to be operated by Mass
Coastal does not connect with the rail lines of any other carriers
controlled by Iowa Pacific through Permian or by Iowa Pacific directly;
(2) the transaction is not part of a series of anticipated transactions
that would connect the rail lines of the carriers; and (3) the
transaction does not involve a Class I rail carrier. The proposed
transaction is therefore exempt from the prior approval requirements of
49 U.S.C. 11323 pursuant to 49 CFR 1180.2(d)(2).
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 11324 and 11325
that involve only Class III rail carriers. Accordingly, the Board may
not impose labor protective conditions here, because all of the
carriers involved are Class III carriers.
If the verified notice contains false or misleading information,
the exemption is void ab initio. Petitions to revoke the exemption
under 49 U.S.C. 10502(d) may be filed at any time. The filing of a
petition to revoke will not automatically stay the effectiveness of the
exemption. Petitions for stay must be filed no later than November 2,
2012 (at least seven days before the exemption becomes effective).
An original and ten copies of all pleadings, referring to Docket
No. FD 35684, must be filed with the Surface Transportation Board, 395
E Street SW., Washington, DC 20423-0001. In addition, a copy of each
pleading must be served on John D. Heffner, Strasburger & Price, LLP,
1700 K Street NW., Suite 640, Washington, DC 20006.
Board decisions and notices are available on our Web site at
``www.stb.dot.gov.''
Decided: October 23, 2012.
By the Board, Rachel D. Campbell, Director, Office of
Proceedings.
Derrick A. Gardner,
Clearance Clerk.
[FR Doc. 2012-26371 Filed 10-25-12; 8:45 am]
BILLING CODE 4915-01-P