Notice2021-13987
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
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 30, 2021
Issuing agencies
Surface Transportation Board
Full Text
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<title>Federal Register, Volume 86 Issue 123 (Wednesday, June 30, 2021)</title>
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[Federal Register Volume 86, Number 123 (Wednesday, June 30, 2021)]
[Notices]
[Page 34830]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[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 <a href="http://www.stb.gov">www.stb.gov</a>.
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
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