[Federal Register Volume 74, Number 126 (Thursday, July 2, 2009)]
[Notices]
[Page 31791]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-15461]


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

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Finance Docket No. 35254]


Red River Valley & Western Railroad Company and Rutland Line, 
Inc.--Corporate Family Transaction Exemption

    Red River Valley & Western Railroad Company (RRVW) and Rutland 
Line, Inc. (Rutland), both Class III rail carriers, have filed a 
verified notice of exemption under 49 CFR 1180.2(d)(3) for a 
transaction within a corporate family. Applicants state that, on or 
about June 27, 2007, all of the stock in Rutland was transferred to 
RRVW, thereby causing Rutland to become a wholly-owned subsidiary of 
RRVW.\1\ At the time, the sole shareholders of applicants were Douglas 
M. Head and Charles H. Clay, with Mr. Head owning the vast majority of 
the stock in each of these companies and Mr. Clay owning the remaining 
shares. Applicants state that the transfer merely resulted in the 
shareholders indirectly controlling Rutland through their control of 
RRVW, rather than controlling Rutland directly.\2\ According to 
applicants, RRVW inadvertently failed to seek Board authority in 2007 
to control Rutland prior to the transfer of ownership interest and they 
now seek to remedy that oversight. The purpose of the transaction was 
to enable Rutland to be treated as a Qualified Subchapter S Subsidiary 
of RRVW for tax purposes.
---------------------------------------------------------------------------

    \1\ Applicants note that Mr. Clay died on March 1, 2009, that 
his ownership interest in RRVW currently is owned by his estate, and 
that it is expected that RRVW will purchase Mr. Clay's shares. They 
add that Mr. Head continues to hold his ownership interest in RRVW.
    \2\ Applicants state that there was no written agreement 
governing the transfer of the shareholders' stock in Rutland to 
RRVW. In its place, they attach as Exhibit B a ``Written Action by 
the Board of Directors and Shareholders of Rutland Line, Inc.''
---------------------------------------------------------------------------

    The exemption will be effective on July 19, 2009.
    This is a transaction within a corporate family of the type 
exempted from prior review and approval under 49 CFR 1180.2(d)(3). The 
parties state that the transaction will not result in adverse changes 
in service levels, significant operational changes, or changes in the 
competitive balance with carriers outside the corporate family.
    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 is employees. Section 11326(c), however, does 
not provide for labor protection for transactions under sections 11324 
and 11325 that involve only Class III rail carriers. Accordingly, the 
Board may not impose labor protective conditions here, because all of 
the carriers involved are Class III rail carriers.
    If the 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 transaction. Petitions for stay 
will be due no later than July 10, 2009 (at least 7 days before the 
effective date of the exemption).
    An original and 10 copies of all pleadings, referring to STB 
Finance Docket No. 35254, must be filed with the Surface Transportation 
Board, 395 E Street, SW., Washington, DC 20423-0001. In addition, one 
copy of each pleading must be served on applicants' representative, 
Rose-Michele Nardi, 1300 19th Street, NW., 5th Floor, Washington, DC 
20036.
    Board decisions and notices are available on our Web site at http://www.stb.dot.gov.

    Decided: June 25, 2009.

    By the Board, Joseph H. Dettmar, Acting Director, Office of 
Proceedings.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. E9-15461 Filed 7-1-09; 8:45 am]
BILLING CODE 4915-01-P