This
is the determination of the Railroad Retirement
Board concerning the continuing status of Chestnut
Ridge Railway Company (Chestnut) (B.A. No.
2205) as an employer under the Railroad Retirement
Act (45 U.S.C. §231, et seq.)
(RRA) and the Railroad Unemployment Insurance
Act (45 U.S.C. §351, et seq.) (RUIA).
Chestnut was determined to be an employer under
the RRA and RUIA with coverage from January
11, 1902. This is also the determination of
the Board concerning the status of Chestnut
Ridge Railroad Corporation (CHR). CHR has not
heretofore been ruled to be a covered employer.
Mr. Donald G. Avery, attorney for CHR, advised
a staff member of the Board’s Office
of General Counsel that substantially all the
assets of Chestnut’s corporate affiliates,
as well as the assets of Chestnut itself, were
purchased by H.H. Liquidating Corporation,
alias Horsehead Corporation, on December 23,
2003, pursuant to a bankruptcy auction in the
matter of Chestnut Ridge Railway Company, et
al, United States Bankruptcy Court, Southern
District of New York, Case No. 02-14024, filed
on August 19, 2002. All that remains of Chestnut
is a corporate shell with no assets. On March
15, 2004, CHR began railroad operations as
a common carrier providing line haul and switching
service to zinc recycling and production facilities
owned by Horsehead Corporation beginning at
milepost 0.0, where it intersects with the
Norfolk Southern at Palmerton, Pennsylvania,
and running northerly to milepost 6.6. CHR
also services three other shippers along this
line. A Surface Transportation Board (STB)
exemption for this operation was granted to
CHR in STB Finance Docket No. 34480, decided
March 23, 2004. Prior to CHR’s beginning
of operations, Horsehead Corporation, owner
of CHR, received STB authority retroactive
to its bankruptcy auction purchase on December
23, 2003, to acquire and operate the rail line
formerly operated by Chestnut. See STB Finance
Docket No. 34481, decided March 12, 2004. Horsehead
Corporation transferred its ownership of Chestnut’s
railroad assets to CHR on March 15, 2004. Horsehead
Corporation neither leased nor contracted for
railroad operations on the Chestnut line subsequent
to its purchase of same and prior to its transfer
of ownership to CHR.
Section 202.11 of the Board’s regulations
provides that:
The employer status of any company or person
shall be terminated
whenever such company or person loses any of
the characteristics essential to the existence
of an employer status.
In view of the foregoing, it is the determination
of the Railroad Retirement Board that Chestnut
Ridge Railway Company ceased to be an employer
covered under the RRA and RUIA on December
23, 2003, the date on which all of its assets
were sold.
Sections 1(a)(1) of the Railroad Retirement
Act (45 U.S.C. §231(a)(1), insofar as
relevant here, defines a covered employer as:
(i) any carrier by railroad subject to the
jurisdiction of the Surface Transportation
Board under Part A of subtitle IV of Title
49 [45 U.S.C. §231(a)(1)(i)].
Sections 1(a) and 1(b) of the Railroad Unemployment
Insurance Act (45 U.S.C.
§ § 351(a) and (b)) contain substantially
the same definition as does section 3231 of the
Railroad Retirement Tax Act (26 U.S.C. § 3231).
Based on the information summarized above,
it is determined that the Chestnut Ridge Railroad
Corporation became an employer covered under
the Railroad Retirement Act and the Railroad
Unemployment Insurance Act on March 15, 2004,
the date it began operations.
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