GWI Proposes to Merge CHAT With, Into BAYL

Written by Carolina Worrell, Senior Editor
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Genesee & Wyoming Inc. (GWI) on Dec. 21 filed a verified notice of exemption with the Surface Transportation Board (STB) to convert Chattahoochee Bay Railroad LLC, a Delaware Corporation, into Chattahoochee Bay Rail Railroad LLC (CHAT LLC), a Delaware liability company, which will result into CHAT merging with and into the Bay Line Railroad, L.L.C. (BAYL).

Filed under 49 CFR 1190.2(d)(3) to exempt from the provisions of 49 U.S.C. 11323 “certain transactions within its corporate family,” the notice of exemption will contribute its membership interests in CHAT LLC down its organizational structure to GWI subsidiary Rail Partners, LP, which also controls BAYL. This transaction, the company says, will result in GWI indirectly controlling CHAT LLC, with BAYL remaining as the surviving Class III rail carrier.

GWI is proposing to merge CHAT LLC with and into BAYL, with BAYL remaining as the surviving Class III carrier.

GWI, which directly and indirectly controls 103 railroads across the U.S., including the entities involved in the subject transactions, also proposes to merge with and into Arkansas Louisiana & Mississippi Railroad Company (ALM), with ALM remaining as the surviving Class III carrier.

GWI is proposing to merge with and into ALM, with ALM remaining as the surviving Class III carrier.

According to the notice of exemption, GWI states that the transactions will “reduce the number of legal entities within its corporate family, resulting in improved efficiencies by reducing overhead and duplication of accounting and IT services and potentially reducing its tax burden while retaining the same assets to serve customers.”

Unless stayed, STB says the exemption will be effective on Jan. 20, 2023 (30 days after the verified notice was filed). GWI states that it intends to consummate the transactions on or about Feb. 1, 2023. The verified notice states that the transactions 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. Therefore, the transactions, STB says, are exempt from the prior approval requirements of 49 U.S.C. 11323. See 49 CFR 1180.2(d)(3).

Under 49 U.S.C. 10502(g), STB “may not use its exemption authority to relieve a rail carrier of its statutory obligation to protect the interests of its employees.” Because GWI controls four Class II carriers and 99 Class III carriers, any employees adversely affected by these transactions will be protected by the conditions required by 49 U.S.C. 11326(a) and set forth in New York Dock Railway—Control—Brooklyn Eastern District Terminal, 360 I.C.C. 60 (1979).

According to STB, 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 Jan. 13, 2023 (at least seven days before the exemption becomes effective).

All pleadings referring to Docket No. FD 36655 must be filed with STB either via e-filing or in writing addressed to 395 E Street, SW, Washington, DC 20423-0001. In addition, a copy of each pleading must be served on Eric M. Hocky, Clark Hill PLC, Two Commerce Square, 2001 Market Street, Suite 2620, Philadelphia, Pa., 19103.

According to GWI, this action is categorically excluded from environmental review under 49 CFR 1105.6(c) and historic reporting requirements under 49 CFR 1105.8(b).

Board decisions and notices are available here.

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