Notice2025-21748
Fortress Investment Group LLC-Control Exemption-Wheeling & Lake Erie Railway Company and Akron Barberton Cluster Railway 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
December 2, 2025
Issuing agencies
Surface Transportation Board
Full Text
<html>
<head>
<title>Federal Register, Volume 90 Issue 229 (Tuesday, December 2, 2025)</title>
</head>
<body><pre>
[Federal Register Volume 90, Number 229 (Tuesday, December 2, 2025)]
[Notices]
[Pages 55326-55328]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-21748]
=======================================================================
-----------------------------------------------------------------------
SURFACE TRANSPORTATION BOARD
[Docket No. FD 36878]
Fortress Investment Group LLC--Control Exemption--Wheeling & Lake
Erie Railway Company and Akron Barberton Cluster Railway Company
On August 28, 2025, Fortress Investment Group LLC (Fortress), a
noncarrier, filed a petition under 49 U.S.C. 10502, seeking an
exemption from the prior approval requirements of 49 U.S.C. 11323 for
the benefit of FTAI Infrastructure, Inc. (FTAI Infrastructure), Percy
Acquisition LLC (PALLC), FIP RR Holding Company LLC
[[Page 55327]]
(FIP HoldCo), and FIP RR Holdings LLC (FIPRR), which are all managed by
an affiliate of Fortress, to acquire control of The Wheeling
Corporation, a noncarrier, and (indirectly) its wholly owned
subsidiaries, Wheeling & Lake Erie Railway Company (W&LE), a Class II
rail carrier, and Akron Barberton Cluster Railway Company (ABC), a
Class III rail carrier. The Board will grant Fortress's petition for
exemption, subject to standard labor protective conditions.
Background
Fortress explains that its affiliate manages FTAI Infrastructure.
(Pet. 4.) FTAI Infrastructure owns 99% of PALLC, which in turn controls
Transtar, LLC (Transtar). (Pet. 4.) \1\ Transtar currently owns and
directly controls six non-connecting Class III rail carriers. (Id. at
2, 8.) \2\ W&LE operates over approximately 982 miles of track in Ohio,
Pennsylvania, West Virginia, and Maryland. (Id. at 7.) ABC operates
over approximately 84 miles of track in the vicinity of Akron, Ohio.
(Id. at 7-8.) \3\
---------------------------------------------------------------------------
\1\ PALLC also owns 100% of FIP HoldCo, and that entity owns
100% of FIPRR. (Id.)
\2\ Those carriers are: Union Railroad Company, LLC (URR); Gary
Railway Company, LLC; Delray Connecting Railroad Company; Texas &
Northern Railway Company, LLC; The Lake Terminal Railroad Company,
LLC; and East Ohio Valley Railway, LLC. (Id. at 4.)
\3\ One of the Transtar railroads, URR, connects with W&LE at
Mifflin Junction, Pa., and Clairton, Pa. For that reason, Fortress
sought Board authority via petition for exemption rather than the
class exemption at 49 CFR 1180.2(d)(2), which applies only to
nonconnecting carriers. (Id. at 6.)
---------------------------------------------------------------------------
Pursuant to a Stock Purchase Agreement dated August 6, 2025, FIPRR
acquired, on August 25, 2025, 100% of the equity interests in The
Wheeling Corporation, which holds 100% of the equity interests in W&LE
and ABC. Immediately upon closing, the shares of The Wheeling
Corporation were deposited into an independent voting trust pursuant to
49 CFR part 1013 pending the Board's consideration of the petition for
exemption. (Pet. 7.) \4\
---------------------------------------------------------------------------
\4\ Fortress submitted the voting trust agreement to the Board
on August 25, 2025.
---------------------------------------------------------------------------
If the transaction is approved and the voting trust is dissolved,
Fortress may be deemed to control (in addition to Transtar's six
existing rail carriers) W&LE and ABC upon their becoming indirect
subsidiaries of FTAI Infrastructure and PALLC. (Pet. 7.) FIPRR will
directly control, and FIP Holdco, PALLC, and FTAI Infrastructure will
indirectly control, The Wheeling Corporation, W&LE, and ABC. (Id.)
In support of its exemption request, Fortress asserts that granting
an exemption will further several goals of the Rail Transportation
Policy (RTP) under 49 U.S.C. 10101. (Pet. 14-15.) Fortress explains
that, among other things, the transaction will enable W&LE and ABC to
benefit from the financial strength of FTAI Infrastructure and PALLC.
(Id. at 15.) Fortress also asserts that the transaction will not lead
to higher rates or reduced service and that W&LE and ABC will continue
to provide freight rail service over their respective lines. (Id.)
Although W&LE and URR share a common customer in the vicinity of
Mifflin Junction, Fortress claims that they do not compete for the same
traffic from that customer and that the customer supports the
transaction. (Id. at 15-16.) That customer, TMS International, LLC
(TMS), filed a statement in support of the transaction on September 8,
2025.
Discussion and Conclusions
The acquisition of control of a rail carrier by a person that is
not a rail carrier but that controls any number of rail carriers
requires prior approval from the Board under 49 U.S.C. 11323(a)(5).
Under 49 U.S.C. 10502(a), however, the Board shall, to the maximum
extent consistent with 49 U.S.C. subtitle IV, part A, exempt a
transaction or service from regulation when it finds that: (1) the
regulation is not necessary to carry out the RTP under 49 U.S.C. 10101;
and (2) either (a) the transaction or service is of limited scope, or
(b) regulation is not needed to protect shippers from the abuse of
market power.
An exemption from the prior approval requirements of 49 U.S.C.
11323-25 in this case is consistent with the standards of 49 U.S.C.
10502. Detailed scrutiny of the proposed transaction through an
application for review and approval under sections 49 U.S.C. 11323-25
is not necessary to carry out the RTP. Permitting Fortress's
acquisition without having to file an application would promote the RTP
by minimizing the need for federal regulatory control over the proposed
transaction, 49 U.S.C. 10101(2); reducing regulatory barriers to entry
into and exit from the industry, 49 U.S.C. 10101(7); and providing for
the expeditious resolution of this proceeding, 49 U.S.C. 10101(15). The
transaction would also enhance W&LE's and ABC's access to capital and
hence facilitate future strategic investment decisions and growth
opportunities. (Pet. 15.) As a result, granting an exemption would
promote a safe and efficient rail transportation system, 49 U.S.C.
10101(3); ensure the continuation of a sound rail transportation
system, 49 U.S.C. 10101(4); and foster sound economic conditions in
transportation, 49 U.S.C. 10101(5). Lastly, as discussed below, the
Board finds that there would be no significant impacts on competition
as a result of the transaction. Accordingly, other aspects of the RTP
would not be adversely affected.
Regulation of the proposed transaction is not necessary to protect
shippers from an abuse of market power.\5\ Although URR connects with
W&LE and they would come under common control through the transaction,
the record here does not suggest any reason for concern about reduced
competition. Fortress explains that the common shipper, TMS, would not
experience an actual reduction because W&LE and URR do not compete for
the same TMS traffic. (Pet. 17.) W&LE moves scrap metal to facilities
in Mingo Junction, Ohio, and Cleveland, Ohio via entirely W&LE local
movements, while URR handles scrap metal heading east to a steel works
in Braddock, Pa., an entirely local URR move, as well as for
interchange to carriers other than W&LE. (Id. at 16-17.) Given their
respective route structures, neither W&LE nor URR is capable of
handling the TMS local movements currently served by the other carrier.
(Id. at 17.) TMS also supports the transaction and asks the Board to
``promptly approve'' it so that the shipper ``can take full advantage
of benefits that will result.'' (See TMS Letter 1, Sept. 8, 2025.)
There were no filings in opposition to the transaction. Based on the
record, the Board finds that the transaction meets the requirements for
an exemption under 49 U.S.C. 10502.
---------------------------------------------------------------------------
\5\ Given this finding, the Board need not determine whether the
transaction is limited in scope. See 49 U.S.C. 10502(a).
---------------------------------------------------------------------------
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. Because the transaction
involves one Class II and one or more Class III rail carriers, the
exemption will be made subject to the labor protection requirements of
49 U.S.C. 11326(b) and Wisconsin Central Ltd.--Acquisition Exemption--
Lines of Union Pacific Railroad, 2 S.T.B. 218 (1997).
The acquisition of control is exempt from environmental reporting
requirements under 49 CFR 1105.6(c)(1) because it will not result in
significant changes in carrier operations. Similarly, under 49 CFR
1105.8(b)(3), no historic reporting is required because the proposed
transaction will not substantially change the level of operations or
maintenance of railroad properties.
[[Page 55328]]
It is ordered:
1. Under 49 U.S.C. 10502, the Board exempts the above transaction
from the prior approval requirements of 49 U.S.C. 11323-25, subject to
the employee protective conditions in Wisconsin Central Ltd.--
Acquisition Exemption--Lines of Union Pacific Railroad, 2 S.T.B. 218
(1997).
2. Notice of this exemption will be published in the Federal
Register.
3. The exemption will become effective on December 26, 2025.
Petitions for stay must be filed by December 5, 2025. Petitions to
reopen must be filed by December 16, 2025.
Decided: November 26, 2025.
By the Board, Board Members, Fuchs, Hedlund, and Schultz.
Zantori Dickerson,
Clearance Clerk.
[FR Doc. 2025-21748 Filed 12-1-25; 8:45 am]
BILLING CODE 4915-01-P
</pre></body>
</html>Indexed from Federal Register on December 2, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.