[Federal Register Volume 79, Number 78 (Wednesday, April 23, 2014)]
[Notices]
[Pages 22759-22760]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-09265]
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DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[Docket No. FD 35816]
Chai Trust Company, LLC, EGI-Fund (14-16) Investors, L.L.C., and
EGI-IPH Investors, L.L.C.--Acquisition of Control Exemption--Iowa
Pacific Holdings, LLC and Permian Basin Railways, Inc.
Chai Trust Company, LLC (Chai Trust), EGI-Fund (14-16) Investors,
L.L.C. (EGI-Fund), and EGI-IPH Investors, L.L.C. (EGI-IPH)
(collectively, Chai-EGI), all noncarriers, have filed a verified notice
of exemption under 49 CFR 1180.2(d)(2) to acquire control of Iowa
Pacific Holdings, LLC (IPH), which directly and indirectly controls 10
Class III rail carriers.\1\
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\1\ In addition, according to Chai-EGI, IPH directly controls
The Pullman Sleeping Car Company, LLC (Pullman), which is awaiting a
determination as to its legal/regulatory status as a rail carrier in
The Pullman Sleeping Car Company--Petition for Exemption from 49
U.S.C. Subtitle IV, Docket No. FD 35738. Chai-EGI states that it is
including Pullman in the scope of this notice of exemption out of an
abundance of caution.
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According to Chai-EGI, Chai Trust controls EGI Fund, which controls
EGI-IPH, a noncarrier holding company that was formed to acquire a
controlling share of the membership interests of IPH. IPH is a
noncarrier short line railroad holding company that owns 100% of
Permian Basin Railways, Inc. (PBR), another noncarrier short line
railroad holding company. Through PBR, IPH indirectly controls nine
common carrier short line railroads.\2\ In addition, IPH directly
controls Rusk, Palestine & Pacific Railroad, LLC and Pullman.
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\2\ Those nine railroads are: (1) Austin & Northwestern Railroad
Company, Inc., operating as the Texas-New Mexico Railroad; (2)
Chicago Terminal Railroad; (3) Mount Hood Railroad; (4) San Luis &
Rio Grande Railroad Company, Inc.; (5) Saratoga & North Creek
Railway, LLC; (6) West Texas & Lubbock Railway Company, Inc.; (7)
West Texas & Lubbock Railroad Company, Inc.; (8) Massachusetts
Coastal Railroad, LLC; and (9) Santa Cruz and Monterey Bay Railway
Company.
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Chai-EGI will, pursuant to an agreement,\3\ purchase approximately
80% of IPH's membership interests. The remaining approximately 20% of
the membership interests will be retained by certain existing IPH
members who constitute IPH's senior management. Chai-EGI intends to
consummate the transaction on or about May 8, 2014 (the effective date
of the exemption is May 7, 2014, 30 days after the verified notice
[[Page 22760]]
of exemption was filed). Chai-EGI states that the purpose of this
transaction is to improve the revenue base of the railroads controlled
by IPH through access to Chai-EGI's resources and to achieve economies
of scale through greater centralization of administrative functions.
Furthermore, Chai-EGI states that it plans to provide or secure access
to sources of capital that will, in turn, promote growth among IPH's
railroads.
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\3\ A copy of a draft of the agreement was submitted under seal
along with a motion for protective order pursuant to 49 CFR
1104.14(b). That motion will be addressed in a separate decision.
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Chai-EGI certifies that: (1) None of the rail lines and carriers to
be controlled pursuant to this notice of exemption connect with one
another; (2) the subject control transaction is not a part of a series
of anticipated transactions that would connect some or all of the rail
lines; and (3) the transaction does not involve a Class I rail carrier.
Therefore, the transaction is 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. Stay petitions must be filed no later than April 30, 2014
(at least seven days before the exemption becomes effective).
An original and 10 copies of all pleadings, referring to Docket No.
FD 35816, must be filed with the Surface Transportation Board, 395 E
Street SW., Washington, DC 20423-0001. In addition, a copy must be
served on Myles L. Tobin, Fletcher & Sippel LLC, 29 North Wacker Drive,
Suite 920, Chicago, IL 60606-2832.
Board decisions and notices are available on our Web site at
``WWW.STB.DOT.GOV.''
Decided: April 18, 2014.
By the Board, Rachel D. Campbell, Director, Office of
Proceedings.
Raina S. White,
Clearance Clerk.
[FR Doc. 2014-09265 Filed 4-22-14; 8:45 am]
BILLING CODE 4915-01-P