[Federal Register Volume 86, Number 123 (Wednesday, June 30, 2021)]
[Notices]
[Page 34830]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-13987]


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SURFACE TRANSPORTATION BOARD

[Docket No. FD 36521]


Fortress Investment Group LLC--Acquisition and Continuance in 
Control Exemption--Ohio River Partners Shareholder LLC, Katahdin 
Railcar Services, LLC, DesertXpress Enterprises, LLC, Union Railroad 
Company, Gary Railway Company, Delray Connecting Railroad Company, 
Texas & Northern Railroad Company, and Lake Terminal Railroad Company

    Fortress Investment Group LLC (Fortress), a noncarrier, has filed a 
verified notice of exemption under 49 CFR 1180.2(d)(2) for the benefit 
of Fortress Transportation and Infrastructure Investors LLC (FTAI) and 
Percy Acquisition LLC (PALLC), which are managed by an affiliate of 
Fortress, to acquire control of five common carrier railroads 
(collectively, the Transtar Railroads) \1\ that are currently owned by 
Transtar, LLC (Transtar), and to continue in control of both the 
Transtar Railroads and certain rail carriers (the Fortress Railroads) 
owned by companies or investment funds managed by affiliates of 
Fortress.\2\
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    \1\ The Transtar Railroads are Union Railroad Company, Gary 
Railway Company, Delray Connecting Railroad Company, Texas & 
Northern Railroad Company, and Lake Terminal Railroad Company. 
Fortress states that all of the Transtar Railroads are Class III 
rail carriers.
    \2\ The Fortress Railroads are Ohio River Partners Shareholder 
LLC (ORPS), Katahdin Railcar Services LLC (KRS), and DesertXpress 
Enterprises, LLC (DXE). Fortress states that DXE is authorized by 
the Board to construct high-speed passenger rail service in 
California, ORPS is a non-operating carrier, and KRS is a Class III 
rail carrier.
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    The verified notice states that on June 7, 2021, PALLC and United 
States Steel Corporation, Transtar's current owner, entered into a 
purchase agreement pursuant to which PALLC will acquire 100% of the 
equity interests of Transtar. Upon consummation of the transaction 
contemplated by the purchase agreement, PALLC, a non-carrier, will 
control the Transtar Railroads. PALLC is owned and controlled by FTAI 
which is managed by an affiliate of Fortress. Following the 
transaction, FTAI will continue to indirectly own 50.1% of the equity 
interests of ORPS and all of the equity interests of KRS, and 
investment funds managed by affiliates of Fortress will continue to 
indirectly own a majority of the equity interests of DXE. According to 
Fortress, ORPS, KRS, and DXE may each be deemed to be controlled by 
Fortress for purposes of 49 U.S.C. 11323, because ORPS and KRS are 
indirectly controlled by FTAI, DXE is indirectly controlled by 
Brightline Holdings LLC, and FTAI and Brightline Holdings LLC are 
managed by affiliates of Fortress.
    The transaction may be consummated on or after July 14, 2021, the 
effective date of the exemption (30 days after the verified notice was 
filed).
    Fortress represents that: (1) None of the Transtar Railroads or 
Fortress Railroads connect with each other or will connect with each 
other following the transaction; (2) the transaction is not part of a 
series of anticipated transactions that would connect any of those 
carriers; and (3) none of the Transtar Railroads or Fortress Railroads 
is 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. However, 49 U.S.C. 11326(c) 
does not provide for labor protection for transactions under 49 U.S.C. 
11324 and 11325 that involve only Class III rail carriers. Because this 
transaction involves Class III rail carriers only, the Board, under the 
statute, may not impose labor protective conditions for this 
transaction.
    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 for stay must be filed no later than July 7, 2021 
(at least seven days before the exemption becomes effective).
    All pleadings, referring to Docket No. FD 36521, should be filed 
with the Surface Transportation Board via e-filing on the Board's 
website. In addition, one copy of each pleading must be served on 
Fortress's representative, Terence M. Hynes, Sidley Austin LLP, 1501 K 
Street NW, Washington, DC 20005.
    According to Fortress, this action is categorically excluded from 
environmental review under 49 CFR 1105.6(c) and from historic reporting 
requirements under 49 CFR 1105.8(b).
    Board decisions and notices are available at www.stb.gov.

    Decided: June 25, 2021.

    By the Board, Scott M. Zimmerman, Acting Director, Office of 
Proceedings.
Brendetta Jones,
Clearance Clerk.
[FR Doc. 2021-13987 Filed 6-29-21; 8:45 am]
BILLING CODE 4915-01-P