[Federal Register Volume 62, Number 68 (Wednesday, April 9, 1997)]
[Notices]
[Pages 17280-17281]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-9205]


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DEPARTMENT OF TRANSPORTATION

Maritime Administration
[Docket S-944]


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 April 4, 
1997, requests further written permission, in addition to its March 14, 
1997, request published on March 19, 1997 (62 FR 13209-11), and its 
March 20, 1997 request published on March 25, 1997 (62 FR 14183), 
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. The April 4, 1997 letter requests permission for 
Lykes 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 Gilman 
Financial Services Inc. (Gilman) through Gilman's wholly owned 
subsidiary GFS Second Transportation Leasing, Inc. (GFST). Reorganized 
Lykes will be 50% owned by GFST. Lykes' operating-differential subsidy 
(ODS) is effective through December 31, 1997, for seven vessels. The 
additional request involves another wholly owned Gilman subsidiary, GFS 
Third Transportation Leasing, Inc., which is the Owner Participant in a 
trust agreement under which Fleet Bank is the Owner Trustee and 
documented owner of the vessel SEA-LAND NAVIGATOR, which is bareboat 
chartered to and operated by Sea-Land Service, Inc. (Sea-Land). The 
SEA-LAND NAVIGATOR, which was built with construction-differential 
subsidy, operates in a mixed domestic/foreign trade, and carries cargo 
between the United States Pacific Coast and Hawaii.
    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 Gilman, through GFS 
Third Transportation Leasing, Inc., indirectly holds a beneficial 
interest in the SEA-LAND NAVIGATOR, that vessel is bareboat chartered 
to and operated by Sea-Land. Lykes states that Reorganized Lykes, as 
the ODS contractor, has absolutely no affiliation with Sea-Land. 
According to Lykes, nothing in the affiliation of Reorganized Lykes and 
Gilman (and its subsidiaries) created by the reorganization will have 
any effect on the operation or competitive status of the SEA-LAND 
NAVIGATOR, and there will be no impact on any competitor of that 
vessel. Lykes indicates that neither it nor Reorganized Lykes plans to 
operate in the trade in which the SEA-LAND NAVIGATOR sails.
    For the foregoing reasons, and in light of the complete operational 
separation between Reorganized Lykes and the operator of the vessel in 
which Gilman indirectly holds a beneficial interest 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 Gilman and its 
subsidiaries. Lykes states that grant of the requested permission will 
facilitate the consummation of the Reorganization Plan and accordingly 
preserve U.S.-flag service and the employment of U.S. seamen. Lykes 
respectfully requests that its application be given the most 
expeditious possible consideration.

[[Page 17281]]

    Notice is also given that Lykes has been authorized to be a party 
to operating agreements under the Maritime Security Program (MSP) 
Contract Nos. MA/MSP-21 through MA/MSP-23. Section 656 of the Act 
provides that no contractor or related party shall receive MSP payments 
during a period when it participates in a noncontiguous trade without 
written permission. The SEA-LAND NAVIGATOR operates in the 
noncontiguous trade to Hawaii. Sea-Land made application under section 
656 for the operation of the SEA-LAND NAVIGATOR among others. A Gilman 
subsidiary is the Owner Participant of the SEA-LAND NAVIGATOR. The 
section 656 aspects are being addressed in Docket MSP-002.
    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 
April 16, 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)).

    Dated: April 7, 1997.

    By order of the Maritime Administrator.
Joel C. Richard,
Secretary.
[FR Doc. 97-9205 Filed 4-8-97; 8:45 am]
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