[Federal Register Volume 66, Number 207 (Thursday, October 25, 2001)]
[Notices]
[Pages 54058-54059]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-26908]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Finance Docket No. 34101]


Bethlehem Steel Corporation, Keystone Railroad Inc., and Lake 
Michigan & Indiana Railroad Company LLC-Corporate Family Transaction 
Exemption

    Bethlehem Steel Corporation (BSC), Keystone Railroad Inc. 
(Keystone), and Lake Michigan & Indiana Railroad Company LLC (LMIC) 
have jointly filed a verified notice of exemption. BSC is forming a new 
Delaware limited liability company (LLC) named LMIC.\1\ The exempt 
transaction involves a proposed corporate restructuring that will 
result in Keystone's division, known as Lake Michigan & Indiana 
Railroad Company (LM&IRC), being spun off into the new LLC and becoming 
an independent direct subsidiary of BSC. Keystone, a Class III rail 
carrier formerly known as Philadelphia, Bethlehem and New England 
Railroad Company, is a direct subsidiary of BSC, that was authorized to 
lease and operate a rail line in Burns Harbor, IN, under the name of 
LM&IRC.\2\
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    \1\ BSC is a noncarrier holding company that controls, directly, 
eight Class III subsidiary railroads, including Keystone. In support 
of the statement, counsel for BSC cites Bethlehem Steel Corporation-
Common Control Exemption-Brandywine Valley Railroad Corporation, 
Upper Merion and Plymouth Railroad Company, STB Finance Docket No. 
33602 (served June 16, 1998), which authorized BSC's indirect 
control of two Class III railroads (and noted BSC's direct control 
of six other Class III railroads); however, in a subsequent letter 
dated October 18, 2001, counsel states that ``any control previously 
indicated to be indirect control has since been changed to direct 
control.''
    \2\ See Keystone Railroad, Inc. d/b/a Lake Michigan and Indiana 
Railroad Company--Lease and Operation Exemption--Bethlehem Steel 
Corporation, STB Finance Docket No. 33797 (STB served Sept. 23, 1999 
and Dec. 13, 1999, respectively).
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    The transaction was scheduled to be consummated on or after October 
2, 2001, the effective date of the exemption (7 days after the notice 
was filed).
    The transaction is a part of the proposed current refinancing and 
restructuring by BSC. BSC and Keystone have determined that the Burns 
Harbor rail line should be operated by a stand alone direct subsidiary 
of BSC instead of a division of Keystone. After the corporate 
restructuring, the rail operations at Burns Harbor and at Bethlehem, 
PA, will be performed by separate corporate entities, each owned 
directly by BSC, similar to all other BSC operations. The corporate 
restructuring will facilitate replacement of BSC's current credit 
arrangements and is intended to provide increased financial liquidity 
and flexibility.
    This is a transaction within a corporate family of the type 
specifically exempted from prior review and approval under 49 CFR 
1180.2(d)(3). The parties stated that the transaction will not result 
in adverse changes in service levels, operational changes, or a change 
in the competitive balance with carriers outside the corporate family.
    Under 49 U.S.C. 10502(g), the board may not use its exemption 
authority to relieve a rail carrier of its statutory

[[Page 54059]]

obligation to protect the interests of its employees. Section 11326(c) 
however, does not provide for labor protection for transactions under 
sections 11324 and 11325 that involve only Class III railroad carriers. 
Because this transaction involves Class III rail carriers only, the 
Board, under that statue, may not impose labor protective conditions 
for this transaction.
    If the 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 transaction.
    An original and ten copies of all pleadings, referring to STB 
Finance Docket No. 34101, must be filed with the Surface Transportation 
Board, Office of the Secretary, Case Control Unit, 1925 K Street, NW., 
Washington, DC 20423-0001. In addition, a copy of each pleading must be 
served on Eric M. Hocky, Gollatz, Griffin & Ewing, P.C., 213 West Miner 
Street, P.O. Box 796, West Chester, PA 19381-0796.
    Board decisions and notices are available on our Web site at 
www.stb.dot.gov.

    Decided: October 19, 2001.

    By the Board, David M. Konschnik, Director, Office of 
Proceedings.
Vernon A. Williams,
Secretary.
[FR Doc. 01-26908 Filed 10-24-01; 8:45 am]
BILLING CODE 4915-00-P