NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 12

- 3807

_____________

In the Matter of PENN CENTRAL TRANSPORTATION COMPANY

, Debtor

PENN CENTRAL TRANSPORTATION COMPANY and AMERICAN PREMIER UNDERWRITERS, INC., the Reorganized Company, Appellants

Appeal from the United States District Court

for the Eastern District of Pennsylvania (District Court No. 2

- 70

- bk

- 00347) District Judge: Honorable Harvey Bartle , III

Argued July 17, 2013

Before: RENDELL, SMITH and ROTH, Circuit Judges

(Opinion Filed: August 14 , 2013 )2

Carl M. Bucholz, Esquire

Brian M . Robinson, Esquire DLA Piper

1650 Market Street One Liberty Place, Suite 4900 Philadelphia, PA 19103

Michael L. Cioffi, Esquire (Argued) Nathaniel R. Jones, Esquire Thomas H. Stewart, Esquire

Blank Rome

201 East 5 th Street

1700 PNC Center Cincinnati, O H 45202

Counsel for Appellant s

Sara J. Geenen, Esquire Frederick Perillo, Esquire (Argued)

The Previant Law Firm

1555 North Rivercenter Drive

Suite 202 Milwaukee, WI 53212

Mark D. Griffin, Esquire

Thorman Petrov Griffin

3100 Terminal Tower

50 Pub lic Square Cleveland, OH 44113

Randy J. Hart, Esquire Randy J. Hart, LLC Carla M. Tricarichi, Esquire

Tricarichi & Carnes

23600 Commerce Park

Suite A Beachwood, OH 44122

Counsel for Appellee s3 O P I N I O N

RENDELL

, Circuit Judge :

Appella nt s Ameri can Premier Underwriters, Inc. , also known as the Reorganized

Company, and the Penn Central Transportation Company (“PCTC”) 1 appeal the District

Court’s order enforcing a $14,761,238 arbitration award in favor of 32 former PCTC

employees or t heir estates (the “Claimants”) against the Reorganized Company . The

award resolved the Claimants’ claims for benefits under a 1964 agreement that was

designed to protect employees of the Pennsylvania Railroad Company and the New York

Central Railroad Company i n the event the railroad s merge d (the “MPA”). For the

reasons di scussed below, we will affirm. 2

In 196 8 , t he Pennsylvania Railroad Company and the New York Central Railroad

Company merged to form PCTC . T he Claimants brought suit s against PCTC under the

M PA in the United States District Court for the Northern District of Ohio (the “Ohio

Court”) in 1969 and 1974 . I n 1970 , PCTC filed for reorganization under § 77 of the

Bank ruptcy Act in t he United States District Court for the Eastern District of

Pennsylva nia (the “Reorganization Court”) . The Reorganization Court authorized the

1 The Pennsylvania Central Transportation Company emerged from bankruptcy in 1978

as The Penn Central Corporation. In 1994, The Penn Central Corporation changed its name to American Premier Underwriters, Inc.

2 The District Court had jurisdiction under § 77 of the Bankruptcy Act of 1898, 11

U.S.C

. § 205 (repealed 1978). This Court has jurisdiction under 28 U.S.C. § 1291.4

Claimants’ actions to proceed outside the bankruptcy, but reserved the right to enforce

any award. 3

In 2009, approximately forty years after this “Dickensian . . . odyssey through the

legal system began,” J.A. 18, an arbitration panel awarded the Claimants $564,820 in

benefits under the MPA and $13,453,504 in pre

- judgment interest. The Reorganized

Company appealed the arbitration panel’s award to the Surface Transportation Board,

which affirmed the award with slight modifications. The Ohio Court then entered

judgment for each Claimant or his or her personal representative with pre

- judgment

interest calculated through the date of its order

, increas ing the total award to $14,761,238

.

Only 5 of the 32 Claimants were alive at that time

.

After the Ohio Court entered judgment , t he Reorganized Company petitioned the

Reorganization Court to exercise its retained jurisdiction to determine whether the

judgment would be enforced

. Follo wing a brief discovery period, both parties moved for

summary judgment. T he Reorganized Company contended , as it argues again on appeal,

t hat (1) the discharge and injunction provisions in the b ankruptcy p lan and the

c onsummation o rder bar liability again st it because the MPA claims arose before and

during the reorganization and (2) the Bankruptcy Act of 1898 and the bankruptcy p lan

forbid post

- petition interest. The Claimants argued that (1) the bankruptcy plan and the

consummation order did not affect t heir rights to MPA benefits because § 77(n) of the

3 In 2007, the Ohio Court ordered the Claimants’ actions to be arbitrated in one consolidated proceeding.5

Bankruptcy Act 4 prohibited the Reorganization C ourt from modi fying their wages and (2)

their award of post

- petition interest was fair given the lengthy passage of time.

We have reviewed the parties ’ arguments, the record, and the applicable law, and

will affirm the District Court’s order enforcing the arbitration award for the reasons

stated in parts I V and V I of its opinion , which provide a thorough and comprehensive

analysis of the Bankruptcy Act an d the issues involved in the arbitration proceeding

. 5

We need not repeat the District Court’s excellent analysis here but note only that we find

it clear t hat § 77 (n) of the Bankruptcy Act prohibits reorganization courts from modifying

the obligations of railroads with respect to the wages and working conditions of their

employees

. As a result

, contrary to Defendants’ position

, the discharge and injunction

provisions of the bankruptcy plan and the consummation order could not have affected

the MPA. T he R eorganized Company, which is “the very same corporation that the

Claimants had sued [for MPA benefits]

— only reorganized with a new name!” , J.A. 35, is

thus required to pay the MPA benefits that the arbitration panel award ed Claimants

.

Similarly, we find it evident that neither the bankruptcy plan nor Supreme Co urt

precedent interpreting the Bankruptcy A ct prohibit post

- petition interest in this fact

patter n
, and that none of the practical consider ation s that typically weigh against allowing

4 The second sentence of § 77(n) reads: “No judge or trustee acting un der this title shall change the wages or working conditions of railroad employees except in the manner prescribed in the Railway Labor Act. . . .” It is undisputed that during the reorganization, PCTC’s obligations under the MPA were not modified under th e Railway Labor Act.

5 As we agree with the District Court’s analysis of the Bankruptcy Act, we will not address the District Court’s alternative holding that, due to its acquiescence in the arbitration proceedings over the course of many years, the Reorg anized Company is estopped from denying liability.6

post

- petition interest are present in this case. Thus, we agree with t he Reorganization

Court’s approval of the award of pre

- judgment interest.

Accordingly , we will affirm the order of the District Court in all respects

.