[Federal Register Volume 77, Number 163 (Wednesday, August 22, 2012)]
[Notices]
[Pages 50761-50762]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-20665]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[Docket No. FD 35660]


GWI Voting Trust and R. Lawrence McCaffery, Voting Trustee--
Control Exemption--RailAmerica, Inc., et al.

    GWI Voting Trust (Voting Trust), a noncarrier, created by Genesee & 
Wyoming Inc. (GWI),\1\ a noncarrier holding company, and R. Lawrence 
McCaffery, a noncarrier individual (Voting Trustee), (collectively, 
applicants) have filed a verified notice of exemption to acquire 
control of RailAmercia, Inc. (RailAmerica) and the 41 United States 
Class III rail carriers that RailAmerica indirectly controls (the 
RailAmerica Railroads).
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    \1\ Applicants state that GWI is participating in this 
proceeding as the settlor.
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    GWI has created the Voting Trust so that the common stock of 
RailAmerica will be placed into an independent voting trust during the 
review of an application for approval that is pending before the Board 
in Docket No. FD 35654, Genesee & Wyoming Inc.--Control--RailAmerica, 
Inc., et al. In that proceeding, GWI is seeking approval of such 
control.
    RailAmerica controls the following Class III rail carriers in the 
United States: Alabama & Gulf Coast Railway L.L.C., Arizona & 
California Railroad Company, Bauxite & Northern Railway Company, 
California Northern Railroad Company, Carolina Piedmont Division, 
Cascade and Columbia River Railroad Company, Central Oregon & Pacific 
Railroad, Inc., The Central Railroad Company of Indiana, Central 
Railroad Company of Indianapolis, Chesapeake & Albemarle Railroad Co., 
Inc., Chicago, Ft. Wayne & Eastern, Conecuh Valley

[[Page 50762]]

Railway, Connecticut Southern Railroad, Inc., Dallas, Garland & 
Northeastern Railroad, Inc., Eastern Alabama Railway, LLC, Grand Rapids 
Eastern Railroad Inc., Huron & Eastern Railway Company, Inc., Indiana & 
Ohio Railway Company, Indiana Southern Railroad, LLC., Kiamichi 
Railroad Company L.L.C., Kyle Railroad Company, Marquette Rail, LLC, 
The Massena Terminal Railroad Company, Mid-Michigan Railroad, Inc., 
Michigan Shore Railroad, Inc., Missouri & Northern Arkansas Railroad 
Company, Inc., New England Central Railroad, Inc., North Carolina & 
Virginia Railroad Company, LLC, Otter Tail Valley Railroad Company, 
Inc., Point Comfort & Northern Railway Company, Puget Sound & Pacific 
Railroad, Rockdale, Sandow & Southern Railroad Company, San Diego & 
Imperial Valley Railroad Company, Inc., San Joaquin Valley Railroad 
Co., South Carolina Central Railroad Company, LLC, Texas Northeastern 
Railroad, Three Notch Railway, LLC, Toledo, Peoria & Western Railway 
Corporation, Ventura County Railroad Corp., Wellsboro & Corning 
Railroad, LLC and Wiregrass Central Railway, LLC.
    Applicants state that, pursuant to an agreement and plan of merger, 
Jaguar Acquisition Sub Inc., a wholly owned subsidiary of GWI, will 
merge with and into RailAmerica, with RailAmerica being the surviving 
corporation. As a result of the merger, GWI will obtain direct control 
of RailAmerica and indirect control of the RailAmerica Railroads. Upon 
completion of the merger, GWI plans immediately to place the shares of 
RailAmercia into the Voting Trust that has been established in 
accordance with the Board's regulations at 49 CFR 1013.\2\ Applicants 
state that, because they would have temporary voting control of more 
than one railroad, they are filing this notice of exemption to confirm 
that, if and when the stock of RailAmerica is placed into the Voting 
Trust, they will have appropriate authority to control RailAmerica and 
the RailAmerica Railroads.\3\ Applicants also note that the Voting 
Trustee will be entitled to vote all of the stock held by the Voting 
Trust.
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    \2\ GWI has submitted a copy of the voting trust agreement to 
the Board for an informal, nonbinding opinion asking whether the 
voting trust would effectively insulate GWI from unauthorized 
acquisition of control of RailAmerica, pending Board review of the 
control application filed in FD 35654. In a letter dated August 3, 
2012, the Director, Office of Proceedings, informed GWI that it is 
her opinion that the proposed voting trust agreement would 
effectively insulate GWI from unauthorized control of RailAmerica.
    \3\ Applicants state that, pursuant to the voting trust 
agreement, the Voting Trust will only hold the shares of RailAmerica 
until the Board acts on the application. If the application is 
approved, the shares of RailAmerica will be distributed to GWI. If 
the application is denied, the shares of RailAmerica (or the 
controlled railroads) will be sold to buyers approved by the Board 
in accordance with the terms of the voting trust agreement.
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    According to applicants, they will not be in control of any 
railroads prior to the stock being placed in the Voting Trust, and that 
there will be no substantial change in the management or operation of 
the RailAmerica Railroads during the time they are in control of them.
    The transaction may be consummated on or after September 5, 2012 
(30 days after the notice of exemption was filed).
    Applicant states that: (1) The rail lines of the RailAmerica 
Railroads do not connect with any rail lines in the corporate family of 
the Voting Trust or the Voting Trustee (they have none); (2) the 
transaction is not part of a series of anticipated transactions that 
would connect these rail lines with each other or any railroad in their 
corporate family; 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. See 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 Sec. Sec.  
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 August 29, 
2012 (at least 7 days before the exemption becomes effective).
    An original and 10 copies of all pleadings, referring to Docket No. 
FD 35660, 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 David H. Coburn, Steptoe & Johnson LLP, 1330 
Connecticut Ave. NW., Washington, DC 20036 and Eric M. Hocky, Thorp 
Reed & Armstrong, LLP, One Commerce Square, 2005 Market Street, Suite 
1000, Philadelphia, PA 19103.
    Board decisions and notices are available on our Web site at 
www.stb.dot.gov.

    Decided: August 17, 2012.

    By the Board, Rachel D. Campbell, Director, Office of 
Proceedings.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2012-20665 Filed 8-21-12; 8:45 am]
BILLING CODE 4915-01-P