B.C.D. 04-39

AUG 2 7 2004

Employer Status Determination

Chestnut Ridge Railway Company

Chestnut Ridge Railway Corporation

This is the determination of the Railroad Retirement Board concerning the

continuing status of Chestnut Ridge Railway Company (Chestnut) (B.A. No.

2205) as an employer under the Railroad Retirement Act (45 U.S.C. §231, et sea.I

(RRA) and the Railroad Unemployment Insurance Act (45 U.S.C. §351, et sea.)

(RUIA). Chestnut was determined to be an employer under the RRA and RUIA

with coverage from January 11,1902. This is also the determination of the Board

concerning the status of Chestnut Ridge Railroad Corporation (CHR). CHR has

not heretofore been ruled to be a covered employer.

Mr. Donald G. Avery, attorney for CHR, advised a staff member of the Board's

Office of General Counsel that substantially all the assets of Chestnut's

corporate affiliates, as well as the assets of Chestnut itself, were purchased by

H.H. Liquidating Corporation, alias Horsehead Corporation, on December 23,

2003, pursuant to a bankruptcy auction in the matter of Chestnut Ridge Railway

Company, et al, United States Bankruptcy Court, Southern District of New York,

Case No. 02-14024, filed on August 19, 2002. All that remains of Chestnut is a

corporate shell with no assets. On March 15, 2004, CHR began railroad

operations as a common carrier providing line haul and switching service to zinc

recycling and production facilities owned by Horsehead Corporation beginning

at milepost 0.0, where it intersects with the Norfolk Southern at Palmerton, 

Pennsylvania, and running northerly to milepost 6.6. CHR also services three

other shippers along this line. A Surface Transportation Board (STB) exemption for

this operation was granted to CHR in STB Finance Docket No. 34480, decided

March 23, 2004. Prior to CHR's beginning of operations, Horsehead Corporation,

owner of CHR, received STB authority retroactive to its bankruptcy auction

purchase on December 23, 2003, to acquire and operate the rail line formerly 

operated by Chestnut. See STB Finance Docket No. 34481, decided March 12,

2004. Horsehead Corporation transferred its ownership of Chestnut’s railroad

assets to CHR on March 15, 2004. Horsehead Corporation neither leased nor

contracted for railroad operations on the Chestnut line subsequent to its

purchase of same and prior to its transfer of ownership to CHR.

Section 202.11 of the Board's regulations provides that:

The employer status of any company or person shall be terminated

whenever such company or person loses any of the characteristics

essential to the existence of an employer status.

BA#2284
-2-

In view of the foregoing, it is the determination of the Railroad Retirement Board

that Chestnut Ridge Railway Company ceased to be an employer covered

under the RRA and RUIA on December 23, 2003, the date on which all of its

assets were sold.

Sections 1 (a)(1) of the Railroad Retirement Act (45 U.S.C. §231 (a)(1), insofar as

relevant here, defines a covered employer as:

(i) any carrier by railroad subject to the jurisdiction of the Surface

Transportation Board under Fart A of subtitle IV of Title 49 [45 U.S.C.

§231 (a) (1) (i)] -

Sections 1 (a) and 1 (b) of the Railroad Unemployment Insurance Act (45 U.S.C.

§ § 351 (a) and (b)) contain substantially the same definition as does section 

3231 of the Railroad Retirement Tax Act (26 U.S.C. § 3231).

Based on the information summarized above, it is determined that the Chestnut

Ridge Railroad Corporation became an employer covered under the Railroad 

Retirement Act and the Railroad Unemployment Insurance Act on March 15,

2004, the date it began operations.

Michael S. Schwartz

w~Ta cCCTCiCCCTr-TZ * V.M. Speakman, Jr.