RailTex, Inc., North Carolina & Virginia Railroad Company, Inc., Chesapeake and Albemarle Railroad Company, Inc., Dallas, Garland & Northeastern Railroad, Inc., Mid-Michigan Railroad, Inc., and Indiana Southern Railroad, Inc.Corporate Family Transaction; Exemption

[Federal Register Volume 64, Number 209 (Friday, October 29, 1999)]
[Notices]
[Pages 58466-58467]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-28412]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board
[STB Finance Docket No. 33809]


RailTex, Inc., North Carolina & Virginia Railroad Company, Inc., 
Chesapeake and Albemarle Railroad Company, Inc., Dallas, Garland & 
Northeastern Railroad, Inc., Mid-Michigan Railroad, Inc., and Indiana 
Southern Railroad, Inc.--Corporate Family Transaction; Exemption

    RailTex, Inc. (RailTex),1 North Carolina & Virginia 
Railroad Company, Inc. (NCVA), Chesapeake and Albemarle Railroad 
Company, Inc. (CA), Dallas, Garland & Northeastern Railroad, Inc., a 
Texas corporation (DGNO), Mid-Michigan Railroad, Inc. (MMRR), and 
Indiana Southern Railroad, Inc. (ISRR), have jointly filed a verified 
notice of exemption. As part of the proposed corporate restructuring: 
(1) the assets of DGNO and MMRR, including the assets of the Texas 
Northeastern Division, a division of MMRR, will be merged into Dallas, 
Garland & Northeastern Railroad, Inc., a Delaware Division (DGNO 
Delaware), with DGNO Delaware as the surviving entity; (2) the assets 
of NCVA and CA will be merged into North Carolina & Virginia Railroad 
Company, Inc., a Delaware corporation (NCVA Delaware), with NCVA 
Delaware as the surviving entity; and (3) ISRR will be reincorporated 
in the State of Delaware. After the transaction is consummated, RailTex 
will control 16 Class III railroads in the United States.
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    \1\ RailTex is a noncarrier, which at the time of filing, 
directly controlled 18 Class III railroads operating in 20 states, 
as well as 3 rail carriers that operate in Canada.
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    The transaction was scheduled to be consummated on or shortly after 
October 15, 1999.
    The purpose of the transaction is to simplify RailTex's corporate 
structure and eliminate costs associated with separate accounting, tax, 
bookkeeping and reporting functions. The proposed transaction will also 
allow for the reincorporation of additional RailTex subsidiaries in the 
State of Delaware

[[Page 58467]]

thereby simplifying RailTex's corporate governance.
    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 state that the transaction will not result in 
adverse changes in service levels, significant 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 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 rail carriers. Because this 
transaction involves Class III rail carriers only, the Board, under the 
statute, 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 reopen the proceeding 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 10 copies of all pleadings, referring to STB 
Finance Docket No. 33809, 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 Karl Morell, P.C., Ball Janik LLP, Suite 225, 1455 F Street, 
NW, Washington, DC 20005.
    Board decisions and notices are available on our website at 
``WWW.STB.DOT.GOV.''

    Decided: October 25, 1999.

    By the Board, David M. Konschnik, Director, Office of 
Proceedings.
Vernon A. Williams,
Secretary.
[FR Doc. 99-28412 Filed 10-28-99; 8:45 am]
BILLING CODE 4915-00-P