NOT PRECEDENTIAL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 5th Street

1700 PNC Center

Cincinnati, OH 45202

Counsel for Appellants

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 Public 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 Appellees
3

O P I N I O N

RENDELL, Circuit Judge:

Appellants American Premier Underwriters, Inc., also known as the Reorganized 

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

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

employees or their 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 in the event the railroads merged (the “MPA”). For the 

reasons discussed below, we will affirm.2

In 1968, the Pennsylvania Railroad Company and the New York Central Railroad 

Company merged to form PCTC. The Claimants brought suits against PCTC under the 

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

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

Bankruptcy Act in the United States District Court for the Eastern District of 

Pennsylvania (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, increasing the total award to $14,761,238. 

Only 5 of the 32 Claimants were alive at that time. 

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

Reorganization Court to exercise its retained jurisdiction to determine whether the 

judgment would be enforced. Following a brief discovery period, both parties moved for 

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

that (1) the discharge and injunction provisions in the bankruptcy plan and the 

consummation order bar liability against it because the MPA claims arose before and 

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

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

consummation order did not affect their 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 Act4prohibited the Reorganization Court from modifying 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 IV and VI of its opinion, which provide a thorough and comprehensive 

analysis of the Bankruptcy Act and 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 that § 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. The Reorganized 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 awarded Claimants. 

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

precedent interpreting the Bankruptcy Act prohibit post-petition interest in this factpattern, and that none of the practical considerations that typically weigh against allowing 

 

4

The second sentence of § 77(n) reads: “No judge or trustee acting under 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 the 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 Reorganized Company is 

estopped from denying liability. 
6

post-petition interest are present in this case. Thus, we agree with the Reorganization 

Court’s approval of the award of pre-judgment interest. 

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