[Federal Register Volume 85, Number 118 (Thursday, June 18, 2020)]
[Notices]
[Pages 36930-36931]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13172]


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SURFACE TRANSPORTATION BOARD

[Docket No. FD 36409]


Jon Delli Priscoli and First Colony Development and Rail Holdings 
Co.--Acquisition of Control Exemption--Massachusetts Coastal Railroad 
LLC

    Jon Delli Priscoli (Delli Priscoli) and First Colony Development 
and Rail Holdings Co. (Holdings) (collectively, the parties) have filed 
a verified notice of exemption under 49 CFR 1180.2(d)(2) to acquire 
control of Massachusetts Coastal Railroad LLC (Mass Coastal), a Class 
III rail carrier operating in Massachusetts.
    The verified notice states that Delli Priscoli owns all of the 
outstanding stock of Grafton and Upton Railroad Co. (G&U), a Class III 
rail carrier, and all of the outstanding stock of Holdings, a newly 
formed noncarrier holding company. Mass Coastal is a wholly owned 
subsidiary of San Luis & Rio Grande Railroad, Inc. (SLRG), which is a 
the debtor in a Chapter 11 bankruptcy proceeding in the U.S. Bankruptcy 
Court for the District of Colorado (the Bankruptcy Court).\1\ The 
Bankruptcy Court and William A. Brandt, as Chapter 11 trustee for the 
bankruptcy estate of SLRG (the Trustee), have established procedures 
for bidding on SLRG's LLC membership interests in Mass Coastal, and 
Holdings states that it intends to submit a bid.\2\ According to the 
verified notice, if Holdings submits the winning bid and the sale is 
approved by the Bankruptcy Court, Holdings would be entitled to acquire 
all of the outstanding membership interests of Mass Coastal. The 
parties state that, upon acquisition of Mass Coastal, Delli Priscoli, 
through Holdings, would control Mass Coastal indirectly and G&U 
directly.
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    \1\ See In re San Luis & Rio Grande R.R., Case No. 19-18905-TBM 
(Bankr. D. Colo.).
    \2\ The Board's exemption authority is permissive only; it does 
not require the authorized transaction to be consummated. See 
Oakland Glob. Rail Enter.--Pet. For Declaratory Order, FD 36168 et 
al., slip op. at 6 n.8 (STB served June 20, 2019) (explaining that 
Board authority is permissive and an entity must still obtain the 
requisite property rights). Thus, this exemption does not foreclose 
any other entity from seeking to acquire Mass Coastal (subject to 
any Board authority that may be needed), and it does not assume or 
affect the outcome of the bidding process.
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    The verified notice states that the schedule for the proposed 
acquisition contemplates consummating the transaction shortly after the 
anticipated approval of the sale by the Bankruptcy Court on a schedule 
that would not allow sufficient time for the parties to file a verified 
notice after the winning bid is selected. Notwithstanding that the 
Board's exemption authority is permissive, under the circumstances, the 
Board will not establish the effective date of this exemption at this 
time, but rather will require Holdings to inform the Board as to the 
result of the bidding process, at which point an effective date can be 
established if Holdings is the successful bidder.
    The parties represent that: (1) The rail lines to be owned or 
operated by G&U and Mass Coastal do not connect with each other or any 
railroads in their respective corporate families; (2) the proposed 
transaction is not part of a series of anticipated transactions that 
would connect the railroads with each other or with any other railroads 
in their respective corporate families; and (3) the proposed 
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).
    The parties state that the purpose of the proposed transaction is 
to afford Mass Coastal improved access to financial resources and 
opportunities to achieve operating efficiencies as a result of common 
control with another rail carrier.
    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. However, 49 U.S.C. 11326(c) 
does not provide for labor protection for transactions under 49 U.S.C. 
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 to stay must be filed no later than June 25, 2020.
    All pleadings, referring to Docket No. FD 36409, must be filed with 
the Surface Transportation Board either via e-filing or in writing 
addressed to 395 E Street SW, Washington, DC 20423-0001. In addition, a 
copy of each pleading

[[Page 36931]]

must be served on the parties' representative, James E. Howard, 57 Via 
Buena Vista, Monterey, CA 93940.
    Board decisions and notices are available at www.stb.gov.

    Decided: June 15, 2020.

    By the Board, Allison C. Davis, Director, Office of Proceedings.
Tammy Lowery,
Clearance Clerk.
[FR Doc. 2020-13172 Filed 6-17-20; 8:45 am]
BILLING CODE 4915-01-P