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A U G 1 1 1976 Mt . A. V Hesse, Jr. L 7 6 w 1 & 6 , / Chief Executive Officer Reading Company, Suite 515 1 Plymouth Meeting Mai 1 Plymouth Meeting, Pennsylvania 1946? Dear Mr. Hesse: This is in reply to your letters of May 10 and June 4, 1976, recreating a determination as to the employer status of the Reading Company Trustees after a conveyance of the Reading Company's railroad properties to the Consolidated Rail Corporation (ConRail) on March 31, 1976. In the affidavit which accompanied your letters, you state that all of the Reading Company’s railroad properties were transferred to ConRail except "light density lines" and that all railroad service on the "light density lines" not transferred to ConRail was discontinued on April I, 1976; that prior to the conveyance the Reading Company employed approximately 5,500 persona, "all engaged directly or indirectly in operating the railroad system," and that after the conveyance the Reading Company employed approximately 10 persons; and that "On and since April 1, 1976, Reading has not and will not perform any railroad transportation service and its activities are and will be to manage the properties retained by it, which properties will not be used by it 'n railroad transportation service, marshal its assets for the benefit of creditors and either seek to reorganize as a non transportation company or liquidate its assets." As I indicated in my letter to you dated April ?, 1976, the conveyance of title, possession, and operation of Reading Company rail property to ConRail supports a determination that the employer status of the Reading Company terminated as to that property as of the date of the conveyance. In addition, it appears from the information which you supplied that the Trustees had ceased to be an employer as to the "light density lines" as of April 1, 1976, when service on those lines was discontinued, and that no other service in connection with rail road transportation has been performed by employees of the Trustees since March 31, 1976. On the basis of the above, and assuming that the activities of the Reading Company are not solely those of a liquidating operation, it appears that the Reading Company Trustees - 2- M r . A. W. Hesse, Jr. ceased to be an employer under the Railroad Retirement Act and the Railroad Unemployment Insurance Act as of April 1, 1976. In this regard, it should be noted that where a railroad continues its existence for the purpose of disposing of its assets, such railroad continues to be a covered employer for a reasonable period of liquidation and, therefore, any ruling holding that the Reading Company had ceased to be an employer would be based on its continued operation for purposes other than liquidation. Consequently, in order to render a more definitive ruling in this matter, it would be necessary that I be informed as to what operations involving its retained properties the Reading Company has in fact performed since April 1, 1976 and will be performing in the future. Very truly yours, Dale G. Zimmerman General Counsel cc: Director of Data Processing and Accounts MCLtraco.

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