[Federal Register Volume 77, Number 57 (Friday, March 23, 2012)]
[Notices]
[Page 17121]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-7054]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[Docket No. FD 35605]


RailAmerica, Inc., Palm Beach Rail Holding, Inc., RailAmerica 
Transportation Corp., RailTex, Inc., Fortress Investment Group, LLC, 
and RR Acquisition Holding, LLC--Control Exemption--Wellsboro & Corning 
Railroad, LLC

    RailAmerica, Inc. (RailAmerica), Palm Beach Rail Holding, Inc. 
(Palm Beach), RailAmerica Transportation Corp. (RTC), RailTex, Inc. 
(RailTex), Fortress Investment Group, LLC (Fortress), and RR 
Acquisition Holding, LLC (RR Acquisition) (collectively, RailAmerica et 
al.), have filed a verified notice of exemption to acquire indirect 
control of the Wellsboro & Corning Railroad, LLC (W&C), a Class III 
rail carrier, through the acquisition of control of TransRail Holdings, 
LLC (TransRail), the parent of W&C, by RailTex.
    The proposed transaction is scheduled to be consummated on or after 
April 7, 2012 (30 days after the notice of exemption was filed).
    W&C acquired the assets of the Wellsboro & Corning Railroad Co.\1\ 
W&C owns and operates 35.5 miles of track between Wellsboro, PA., 
milepost 109.90, and Erwin, N.Y., milepost 74.70, in Tioga County, PA., 
and Steuben County, N.Y. W&C interchanges traffic with the Norfolk 
Southern Railway Company and the Canadian Pacific Railway Company.
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    \1\ Wellsboro & Corning R.R.--Acquis. & Operation Exemption--
Wellsboro & Corning R.R., FD 35595 (STB served Feb. 22, 2012).
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    According to the verified notice of exemption, RailTex entered a 
Unit Purchase Agreement dated January 31, 2012 (the Agreement), with 
(1) TransRail, (2) Industrial Waste Group, LLC (IWG), (3) Wellsboro & 
Corning Railroad Co., and (4) A. Thomas Myles III, A. Thomas Myles IV, 
and William Myles (the MG Principals). The MG Principals own TransRail, 
and TransRail owns W&C and the successor to IWG. Under the Agreement, 
RailTex will acquire 100% of the Class A Common Units of TransRail, 
giving RailTex a 70% ownership interest in TransRail and control of W&C 
through TransRail. The MG Principals will retain the Class B Common 
Units of TransRail, thereby retaining a 30% interest in TransRail, 
though they will not retain control or the power to control W&C.
    Fortress' noncarrier affiliate, RR Acquisition, currently owns 
about 60% of the publicly traded shares and controls the noncarrier 
RailAmerica, which directly controls the noncarrier Palm Beach, which 
directly controls the noncarrier RTC.
    RailAmerica states that it controls the following Class III rail 
carriers: (1) Alabama & Gulf Coast Railway LLC; (2) Arizona & 
California Railroad Company; (3) Bauxite & Northern Railway Company; 
(4) California Northern Railroad Company; (5) Cascade and Columbia 
River Railroad Company; (6) Central Oregon & Pacific Railroad, Inc.; 
(7) The Central Railroad Company of Indiana; (8) Central Railroad 
Company of Indianapolis; (9) Connecticut Southern Railroad, Inc.; (10) 
Conecuh Valley Railway, LLC; (11) Dallas, Garland & Northeastern 
Railroad, Inc.; (12) Delphos Terminal Railroad Company, Inc.; (13) 
Eastern Alabama Railway, LLC; (14) Huron & Eastern Railway Company, 
Inc.; (15) Indiana & Ohio Railway Company; (16) Indiana Southern 
Railroad, LLC; (17) Kiamichi Railroad Company, LLC; (18) Kyle Railroad 
Company; (19) The Massena Terminal Railroad Company; (20) Mid-Michigan 
Railroad, Inc.; (21) Missouri & Northern Arkansas Railroad Company, 
Inc.; (22) New England Central Railroad, Inc.; (23) North Carolina & 
Virginia Railroad Company, LLC; (24) Otter Tail Valley Railroad 
Company, Inc.; (25) Point Comfort & Northern Railway Company; (26) 
Puget Sound & Pacific Railroad; (27) Rockdale, Sandow & Southern 
Railroad Company; (28) San Diego & Imperial Valley Railroad Company, 
Inc.; (29) San Joaquin Valley Railroad Company; (30) South Carolina 
Central Railroad Company, LLC; (31) Three Notch Railway, LLC; (32) 
Toledo, Peoria & Western Railway Corporation; (33) Ventura County 
Railroad Corp.; and (34) Wiregrass Central Railway, LLC.\2\
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    \2\ On February 3, 2012, in Docket No. FD 35592, RailAmerica et 
al. filed a petition for exemption from the prior approval 
requirements of 49 U.S.C. 11323-25 to acquire control of Marquette 
Rail, LLC, a Class III rail carrier. The Board issued a notice on 
February 28, 2012, instituting an exemption proceeding pursuant to 
49 U.S.C. 10502(b).
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    Further, Fortress, on behalf of other equity funds managed by it 
and its affiliates, directly controls the noncarrier FECR Rail LLC, 
which directly controls FEC Rail Corp., which directly controls Florida 
East Coast Railway, LLC, a Class II rail carrier.
    RailAmerica et al. states that: (1) W&C does not connect with any 
of RailAmerica's subsidiary railroads; (2) the proposed transaction is 
not part of a series of anticipated transactions to connect W&C and any 
of RailAmerica's subsidiary railroads; and (3) the proposed transaction 
does not involve a Class I rail carrier. The proposed transaction is 
therefore exempt from the prior approval requirements of 49 U.S.C. 
11323 pursuant to 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. Because the transaction 
involves the control of one or more Class III rail carriers and one 
Class II rail carrier, the transaction is subject to the labor 
protective requirements of 49 U.S.C. 11326(b) and Wisconsin Central 
Ltd.--Acquisition Exemption--Lines of Union Pacific Railroad, 2 S.T.B. 
218 (1997).
    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 by March 30, 2012 (at least 
seven days before the exemption becomes effective).
    An original and ten copies of all pleadings, referring to Docket 
No. FD 35605 must be filed with the Surface Transportation Board, 395 E 
Street SW., Washington, DC 20423-0001. In addition, a copy of each 
pleading must be served on: Louis E. Gitomer, 600 Baltimore Avenue, 
Suite 301, Towson, MD 21204.
    Board decisions and notices are available on our Web site at 
www.stb.dot.gov.

    Decided: March 20, 2012.

    By the Board, Rachel D. Campbell, Director, Office of 
Proceedings.
Raina S. White,
Clearance Clerk.
[FR Doc. 2012-7054 Filed 3-22-12; 8:45 am]
BILLING CODE 4915-01-P