[Federal Register Volume 79, Number 40 (Friday, February 28, 2014)]
[Notices]
[Pages 11498-11499]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-04461]


-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[Docket No. FD 35806]


Fortress Investment Group LLC--Continuance in Control Exemption--
Florida East Coast Railway, L.L.C. and Central Maine & Quebec Railway 
US Inc.

    Fortress Investment Group LLC (Fortress Investment) has filed a 
verified notice of exemption pursuant to 49 CFR 1180.2(d)(2), for the 
benefit of an investment fund managed by an affiliate of Fortress 
Investment, Fortress Worldwide Transportation and Infrastructure 
General Partnership (Fortress Worldwide), to continue in control of 
Central Maine & Quebec Railway US Inc. (CMQR), a noncarrier, upon 
CMQR's becoming a Class III railroad.
    This transaction is related to a concurrently filed verified notice 
of exemption in Central Maine & Quebec Railway US Inc.--Acquisition and 
Operation Exemption--Montreal, Maine & Atlantic Railway, Ltd., Docket 
No. FD 35805, wherein CMQR seeks Board approval under 49 CFR 1150.31 to 
acquire and operate approximately 244.2 miles of rail line in Maine and 
Vermont currently owned and operated by the bankrupt Montreal, Maine & 
Atlantic Railway, Ltd. (MMA).\1\ As discussed in that notice, CMQR is a 
subsidiary of Rail Acquisition Holdings LLC (RAH), which is, in turn, 
owned and controlled by Fortress Worldwide.\2\
---------------------------------------------------------------------------

    \1\ MMA and MMA's Canadian affiliate, Montreal Maine & Atlantic 
Canada Co. (MMA Canada) filed bankruptcy petitions with the United 
States Bankruptcy Court for the District of Maine and the Superior 
Court for the Province of Quebec, District of Montreal, 
respectively, on August 7, 2013, following a rail accident in Lac 
M[eacute]gantic, Que., on July 6, 2013.
    \2\ Pursuant to the Asset Purchase Agreement (Agreement) between 
the trustee, MMA, and MMA Canada, RAH will assign its rights to CMQR 
and to a Canadian subsidiary of RAH, Central Maine & Quebec Railway 
Canada, Inc. (CMQR Canada), to enable CMQR to acquire the U.S. rail 
assets of MMA and CMQR Canada to acquire the Canadian rail assets of 
MMA Canada. CMQR Canada will file an application with the Canada 
Transportation Agency to seek authority concerning the Canadian 
lines.
---------------------------------------------------------------------------

    The purpose of this verified notice of exemption and the 
concurrently filed one in Docket No. FD 35805 is to restore and 
preserve rail service on and over the rail lines of the bankrupt MMA 
located in Maine and Vermont. Although MMA has continued to provide 
certain rail services while in bankruptcy, east-west through service 
between points in Quebec and points in Maine has not been available to 
shippers since the July 2013 Lac M[eacute]gantic rail accident in 
Quebec. CMQR and CMQR Canada will provide rail service over the entire 
pre-bankruptcy rail network of MMA and MMA Canada.
    The parties intend to consummate the proposed transaction as soon 
as practicable after the effective date of this notice of exemption and 
the concurrent notice of exemption filed in Docket No. FD 35805.\3\
---------------------------------------------------------------------------

    \3\ Pursuant to the 49 CFR 1150.32(e), CMQR must provide notice 
to labor regarding the line acquisition and certify to the Board 
that it has done so 60 days before the exemption becomes effective; 
the parties cannot close this transaction until April 15, 2014. CMQR 
has petitioned the Board to waive this period so that the parties 
can consummate their sale transaction on or before March 31, 2014, 
in accordance with the Agreement and the bankruptcy court's 
expectations. The Board will rule on this waiver request in a 
separate decision.
---------------------------------------------------------------------------

    Fortress Investment notes that another rail carrier subject to the 
Board's jurisdiction, Florida East Coast Railway, L.L.C. (FECR), is 
currently owned by FECR Rail Holding LLC, which is, in turn, owned by 
investment funds managed by an affiliate of Fortress Investment. FECR, 
a Class II carrier, operates approximately 350 miles of rail lines in 
Florida extending between Jacksonville and the Miami metropolitan area.
    Fortress Investment represents that: (1) The railroads would not 
connect with each other or any railroads in its corporate family; (2) 
the continuance in control is not part of a series of anticipated 
transactions that would connect CMQR's rail lines with the lines of any 
other rail carrier owned by Fortress Investment or any investment fund 
managed by any affiliate of Fortress Investment; 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. As a condition to the use of 
this exemption, any employees adversely affected by this transaction 
will be protected by the conditions set forth in Wisconsin Central 
Ltd.--Acquisition Exemption--Lines of Union Pacific Railroad, 2 S.T.B. 
218 (1997).
    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 effectiveness of the exemption. 
Petitions for stay must be filed no later than March 7, 2014.

[[Page 11499]]

    An original and 10 copies of all pleadings, referring to Docket No. 
FD 35806 must be filed with the Surface Transportation Board, 395 E 
Street SW., Washington, DC 20423-0001. In addition, one copy of each 
pleading must be served on Terence M. Hynes, Sidley Austin LLP, 1501 K 
Street NW., Washington, DC 20005, and on Robert J. Keach, Esq. (as 
Trustee for MMA), c/o Bernstein, Shur, Sawyer & Nelson, P.A., 100 
Middle Street, Portland, ME 04104-5029.
    Board decisions and notices are available on our Web site at 
WWW.STB.DOT.GOV.

    Decided: February 25, 2014.

    By the Board.
Rachel D. Campbell,
Director, Office of Proceedings.
Raina S. White,
Clearance Clerk.
[FR Doc. 2014-04461 Filed 2-27-14; 8:45 am]
BILLING CODE 4915-01-P