[Federal Register Volume 62, Number 57 (Tuesday, March 25, 1997)]
[Notices]
[Page 14183]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7658]



[[Page 14183]]

-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION
Maritime Administration
[Docket S-943 Sub. 1]


Lykes Bros. Steamship Co., Inc.; Notice of Additional Application 
for Written Permission Pursuant to Section 805(a) of the Merchant 
Marine Act, 1936, as Amended

    Lykes Bros. Steamship Co., Inc. (Lykes), by letter of March 20, 
1997, requests additional written permission to its March 14, 1997, 
request published on March 19, 1997 (62 F.R. 13209-11), pursuant to 
section 805(a) of the Merchant Marine Act, 1936, as amended (Act), and 
Lykes' Operating-Differential Subsidy Agreement (ODSA), Contract MA/
MSB-451 to become affiliated after the confirmation of its Chapter 11 
plan of reorganization (Reorganization Plan), when it will emerge from 
Chapter 11 as a reorganized entity (Reorganized Lykes), with GATX Third 
Aircraft. Lykes' operating-differential subsidy (ODS) is effective 
through December 31, 1997, for seven vessels. The additional 
information involves GATX Third Aircraft which is owned by GATX 
Capital, which is owned by GATX Financial Services, which in turn is 
owned by GATX Corporation, which owns but leases out and does not 
operate the following vessels in the domestic trade:

DAVID NORTON
G. STINSON
WOLVERINE
ITBU PRESQUE ISLE

    The above four vessels are self-unloading bulk vessels engaged in 
trade on the Great Lakes.

TANK BARGE TEXAS
TANK BARGE PENNSYLVANIA

    These barges are operated in the coastwise trade and carry 
petroleum products.

68 Double Skin Tank Barges

    These barges carry petroleum products and chemicals on U.S. rivers 
and inland waterways and occasionally operate in the U.S. coastwise 
trades.
    The ``affiliation'' giving rise to this request for permission will 
be created as part of a restructuring under the supervision of the 
United States Bankruptcy Court. Lykes believes that the operational 
facts of this situation should be distinguished from the more common 
section 805(a) situation in which an ODS contractor wishes to directly 
or indirectly establish a domestic service. While GATX Third Aircraft 
owns the vessels involved, they are all leased and operated by others. 
Lykes states that neither GATX Third Aircraft nor any of its parent 
companies have any affiliation whatever with the ODS contractor, and 
the circumstances giving rise to the need for section 805(a) permission 
will have absolutely no impact on the way in which that domestic 
service is provided.
    Lykes indicates that Lykes and GATX Third Aircraft and the latter's 
parent companies currently have no operational relationship whatsoever. 
According to Lykes, that situation will continue after approval of the 
Reorganization Plan and acquisition of ownership of Lykes. Reorganized 
Lykes will continue as the ODS contractor, and GATX Third Aircraft will 
not be involved in any way in Reorganized Lykes' operations. 
Reorganized Lykes and GATX Third Aircraft will have separate 
management, separate books, and separate operational staff, and will 
provide geographically separate services. The only relationship between 
the companies will be that they will have a common ultimate parent. In 
the case of Reorganized Lykes, that ultimate parent (GATX Corporation) 
is three companies ``up stream'' in the corporate ownership hierarchy. 
According to Lykes, no subsidy paid to Reorganized Lykes will be 
diverted directly or indirectly to GATX Third Aircraft, nothing in GATX 
Third Aircraft's finances or operations will change as a result of the 
reorganization, and there will be no impact on any competitor.
    For the foregoing reasons, and in light of the degree of separation 
between Reorganized Lykes and GATX Third Aircraft and the short 
remaining term of Lykes' ODS contract, Lykes requests that the 
Secretary issue written permission pursuant to section 805(a) for 
Reorganized Lykes to become affiliated with GATX Third Aircraft. 
Because this permission is an integral part of the Reorganization Plan 
under consideration by the Bankruptcy Court, Lykes respectfully 
requests that its application be given the most expeditious possible 
consideration and that written permission be granted as soon as 
possible.
    The application may be inspected in the Office of the Secretary, 
Maritime Administration. Any person, firm or corporation having any 
interest (within the meaning of section 805(a)) in Lykes' request and 
desiring to submit comments concerning the request must by 5:00 PM on 
March 28, 1997, file written comments in triplicate with the Secretary, 
Maritime Administration, together with petition for leave to intervene. 
The petition shall state clearly and concisely the grounds of interest, 
and the alleged facts relied on for relief.
    If no petition for leave to intervene is received within the 
specified time or if it is determined that petitions filed do not 
demonstrate sufficient interest to warrant a hearing, the Maritime 
Administration will take such actions as may be deemed appropriate.
    In the event petitions regarding the relevant section 805(a) issues 
are received from parties with standing to be heard, a hearing will be 
held, the purpose of which will be to receive evidence under section 
805(a) relative to whether the proposed operations (a) could result in 
unfair competition to any person, firm, or corporation operating 
exclusively in the coastwise or intercoastal service, or (b) would be 
prejudicial to the objects and policy of the Act relative to domestic 
trade operations.

(Catalog of Federal Domestic Assistance Program No. 20.805 
(Operating-Differential Subsidy))

    By Order of the Maritime Administrator.

    Dated: March 21, 1997.
Joel C. Richard,
Secretary.
[FR Doc. 97-7658 Filed 3-24-97; 8:45 am]
BILLING CODE 9410-81-P