Eastern Railroad Discussion > CN to use B&LE to acquire CSX Montreal line

Here is title of CN’s STB filing posted Friday 10/11/19:
“ BESSEMER AND LAKE ERIE RAILROAD COMPANY — ACQUISITION AND OPERATION — CERTAIN RAIL LINES OF CSX TRANSPORTATION, INC. IN ONONDAGA, OSWEGO, JEFFERSON, SAINT LAWRENCE, AND FRANKLIN COUNTIES, NEW YORK”

Actual .PDF giving details hasn’t been posted yet but should be on-line after the Monday holiday I’m guessing.

Posted from iPhone

Perhaps there is a legal reason to use a US subsidiary (of CN) to purchase the line.

chiefds Wrote:
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> Perhaps there is a legal reason to use a US
> subsidiary (of CN) to purchase the line.

You are correct.  The Canadian lines CP and CN operate in the US through US roads which they own.
ALLEN 

Grand Trunk or Grand Trunk Western no longer exist for the purpose ? 

krm152 Wrote:
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> chiefds Wrote:
> --------------------------------------------------
> -----
> > Perhaps there is a legal reason to use a US
> > subsidiary (of CN) to purchase the line.
>
> You are correct.  The Canadian lines CP and CN
> operate in the US through US roads which they
> own.
> ALLEN 

I believe there's also a requirement that the dispatchers for these lines are located in the US.

Federal law requires all railroad trackage in the U.S. to be owned by a U.S. corporation and dispatched from an office on U.S. soil.

CN has four U.S. subsidiaries: The B&LE, Grand Trunk Corp., Illinois Central and Wisconsin Central. The EJ&E, DM&IR and DW&P were all merged into Wisconsin Central after the 2009 purchase of EJ&E. Each subsidiary bargains and has a separate agreement with its unionized employees. I suspect the vagarities of these labor agreements is what keeps the subsidiaries apart.

I might be mistaken, but I believe the only reason B&LE has not been merged into one of the other companies was it is a bit of an orphan stepchild, having no phytsical connection to the rest of CN's U.S. rail network and has been rumored to be for sale since it was acquired. Perhaps now it will become more relevant to CN.

BTW, Soo Line still exists on paper to hold all of CP's assets in the U.S. Occasionally in the Chicago papers they will publish a legal notice for bidding on a supply contrract (e.g., diesel fuel at Bensenville) or an RFP on construction work and it will always be for "Soo Line, Inc., d/b/a Canadian Pacific Railway."

NZ

On paper, does Soo Line hold ex-D&H assets ? 

Soo Line Corporation holds three railroad subsidiaries of Canadian Pacific, Soo Line Railroad, Dakota, Minnesota & Eastern, and Delaware & Hudson. All three of these companies
d/b/a Canadian Pacific. The three are kept separate for reasons of crew contracts, although none are members of the Class I bargaining group. 

Does Grupo Mexico use a US subsidiary to hold the Florida East Coast rail assets?  Virgin / Brightline is partly owned by companies owned by Japanese giant SoftBank, I believe.

It's easy enough to incorporate a US subsidiary to hold US assets while keeping the parent company's business away from US oversight.  Banks, insurance companies,  and brokerage houses do that all the time.