Central Maine & Quebec Railway U.S. Inc.-Acquisition and Operation Exemption-Montreal, Maine & Atlantic Railway, Ltd., 11497-11498 [2014-04460]

Agencies

• Surface Transportation Board
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 79, Number 40 (Friday, February 28, 2014)]
[Notices]
[Pages 11497-11498]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-04460]


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

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[Docket No. FD 35805]


Central Maine & Quebec Railway U.S. Inc.--Acquisition and 
Operation Exemption--Montreal, Maine & Atlantic Railway, Ltd.

    Central Maine & Quebec Railway U.S. Inc. (CMQR),\1\ a noncarrier, 
has filed a verified notice of exemption under 49 CFR 1150.31 to 
acquire and operate certain rail lines in the United States currently 
owned and operated by Montreal, Maine & Atlantic Railway, Ltd. 
(MMA).\2\
---------------------------------------------------------------------------

    \1\ CMQR is a subsidiary of Rail Acquisition Holdings LLC (RAH). 
RAH is, in turn, indirectly owned and controlled by Fortress 
Worldwide Transportation and Infrastructure General Partnership 
(Fortress Worldwide), an investment fund managed by an affiliate of 
Fortress Investment Group LLC (Fortress Investment).
    \2\ CMQR will acquire approximately 244.2 miles of rail lines 
located in the United States. The specific lines to be acquired by 
CMQR include: (1) A rail line beginning at a point in the vicinity 
of Searsport, Me., designated on MMA's system map as milepost 0.0+ 
of MMA's Searsport Subdivision and continuing north through the 
state of Maine through Brownville Junction to a point in the 
vicinity of Millinocket, Me., designated as milepost 109.00+1 of 
MMA's Madawaska Subdivision; (2) a rail line beginning at a point in 
the vicinity of Millinocket, Me., designated on MMA's system map as 
milepost 0.0+ of the East Millinocket Subdivision and continuing 
southeast to East Millinocket, Me., to a point designated as 
milepost 6.19+ of MMA's East Millinocket Subdivision; (3) a rail 
line beginning at a point in the vicinity of Brownville Junction, 
Me., designated on MMA's system map as milepost 0.0+ on MMA's K.I. 
Subdivision and continuing to a point in the vicinity of Brownville 
Junction, Me., designated as milepost 4.0+ of the K.I. Subdivision; 
(4) a rail line beginning in the vicinity of Brownville Junction, 
Me., from a point of connection with Eastern Maine Railway Company 
designated on MMA's system map as milepost 0.0+ of MMA's Moosehead 
Subdivision and continuing west to the United States/Canada border 
near Skinner, Me., designated as milepost 101.80+ of the Moosehead 
Subdivision; and (5) a rail line beginning at the United States/
Canada border crossing in the vicinity of Richford, Vt., designated 
on MMA's system map as milepost 26.25+ of MMA's Newport Subdivision 
and continuing south to a point in the vicinity of Newport, Vt., 
designated as milepost 60.4+ at the end of the Newport Subdivision.
---------------------------------------------------------------------------

    MMA and MMA's Canadian affiliate, Montreal Maine & Atlantic Canada 
Co. (MMA Canada) filed bankruptcy petitions with the United States 
Bankruptcy Court for the District of Maine and the Superior Court for 
the Province of Quebec, District of Montreal, respectively, on August 
7, 2013, following a rail accident in Lac M[eacute]gantic, Que., on 
July 6, 2013. Since that time, the rail business of MMA and MMA Canada 
has been operated under the oversight of Robert J. Keach, the Chapter 
11 Trustee in the MMA bankruptcy proceeding.
    On December 12, 2013, RAH entered into an Asset Purchase Agreement 
(Agreement) with Trustee Keach, MMA, and MMA Canada, pursuant to which 
RAH agreed to purchase certain rail assets of both MMA and MMA Canada. 
Thereafter, both the U.S. Bankruptcy Court and the Quebec Superior 
Court issued final orders approving the sale of the rail assets of MMA 
and MMA Canada to RAH.\3\
---------------------------------------------------------------------------

    \3\ Pursuant to the Agreement, RAH will assign its rights under 
the Agreement to CMQR and to a Canadian subsidiary of RAH, Central 
Maine & Quebec Railway Canada, Inc. (CMQR Canada), to enable CMQR to 
acquire the U.S. rail assets of MMA and CMQR Canada to acquire the 
Canadian rail assets of MMA Canada. CMQR Canada will file an 
application with the Canada Transportation Agency to seek authority 
concerning these Canadian lines.
---------------------------------------------------------------------------

    The purpose of the proposed transaction is to restore and preserve 
rail service on and over the rail lines of the bankrupt MMA located in 
Maine and Vermont. Although MMA has continued to provide certain rail 
services while in bankruptcy, east-west through service between points 
in Quebec and points in Maine has not been available to shippers since 
the Lac M[eacute]gantic disaster. CMQR and CMQR Canada will provide 
rail service over the entire pre-bankruptcy rail network of MMA and MMA 
Canada.
    This transaction is related to a concurrently filed verified notice 
of exemption in Fortress Investment Group LLC--Continuance in Control 
Exemption--Florida East Coast Railway, L.L.C. and Central Maine & 
Quebec Railway U.S. Inc., Docket No. FD 35806, wherein Fortress 
Investment seeks Board approval under 49 CFR 1180.2(d)(2) to continue 
in control of Florida East Coast Railway, L.L.C., and CMQR upon CMQR's 
becoming a carrier.
    CMQR has certified that its projected annual revenues as a result 
of this transaction will not result in CMQR's becoming a Class II or 
Class I rail carrier, but that its projected annual revenues will 
exceed $5 million. Accordingly, CMQR is required, at least

[[Page 11498]]

60 days before this exemption is to become effective, to send notice of 
the transaction to the national offices of the labor unions with 
employees on the affected lines, post a copy of the notice at the 
workplace of the employees on the affected lines, and certify to the 
Board that it has done so. 49 CFR 1150.32(e). CMQR, concurrently with 
its notice of exemption, filed a petition for waiver of the 60-day 
advance labor notice period. CMQR's waiver request will be addressed in 
a separate decision.
    CMQR states that it intends to consummate the transaction as soon 
as practicable after the effective date of this exemption. The Board 
will establish in a separate decision on the waiver request the 
earliest date that this transaction may be consummated.
    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 effectiveness of the exemption. 
Petitions for stay must be filed no later than March 7, 2014.\4\
---------------------------------------------------------------------------

    \4\ A stay would normally be due in this case by April 8, 2014. 
Here, however, the due date for stays will be March 7, 2014. The 
date is set earlier in case the Board grants CMQR's petition for 
waiver of the 60-day notice period and allows the exemption to 
become effective on March 17, 2014. Having stays due on March 7 for 
this case also creates uniformity with the due date for stays in 
Docket No. FD 35806.
---------------------------------------------------------------------------

    An original and 10 copies of all pleadings, referring to Docket No. 
FD 35805 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 Robert J. Keach, Esq. (as Trustee for MMA), 
c/o Bernstein, Shur, Sawyer & Nelson, P.A., 100 Middle Street, 
Portland, ME 04104-5029, and on Terence M. Hynes, Sidley Austin LLP, 
1501 K Street NW., Washington, DC 20005.
    Board decisions and notices are available on our Web site at 
www.stb.dot.gov.

    Decided: February 25, 2014.

    By the Board, Rachel D. Campbell, Director, Office of 
Proceedings.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2014-04460 Filed 2-27-14; 8:45 am]
BILLING CODE 4915-01-P