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Memorandum ML-84-24 a R C H 2 ' 1 9 8 4

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Memorandum ML-84-24 a R C H 2 ' 1 9 8 4 UNITED STATES GOVERNMENT RAILROAD RETIREMENTBOARD March 2 , Memorandum ML-84-24 a r c h 2 ' 1 9 8 4 TO : Director of Compensation and Certification f r o m : Deputy General Counsel SU BJE C T: Auto-Train Corporation Employer Status - Termination This is in response to your request of January 18, 1984, for an opinion as to the status of Auto-Train Corporation as an employer under the Railroad Unemployment Insurance and Railroad Retirement Acts. This company has previously been held to be an employer, under those Acts and appears in the Employer Status Book as Item No. 387.2, with service creditable from December 6, 1971 to date. Auto-Train was organized for the purpose of providing transportation of passengers and their autos non-stop by rail between Virginia and Florida. In Auto-Train Corp., Operation Rail & Passenger Automobile Transport Service, Between Alexandria, Va., and Sanford, Fla., 342 ICC 533, (1971), the Interstate Commerce Commission held Auto-Train to be a carrier subject to the jurisdiction of the Commission. Based on this determination, the General Counsel held Auto-Train to be an employer under the Acts as a carrier subject to Part I of the Interstate Commerce Act. See L-71-290. On September 8, 1980, Auto-Train filed a petition to reorganize under Chapter 11 of the Federal bankruptcy laws. In a letter dated December 23, 1983, Ms. Imogene Lehman, of the law firm which is acting as Counsel to the Trustee, stated that the United States Bankruptcy Court for the District of Columbia directed that Auto-Train terminate its rail operations as of May 1, 1981. She further stated that Auto-Train had been in the process of liquidation since May 4, 1981, had at present only two employees remaining on the payroll, and had divested itself of almost all of its assets, including all its railroad facilities. She enclosed a copy of an order of the Bankruptcy Court filed on September 13, 1983, authorizing Auto-Train to sell its Sanford, Florida terminal facilities to Amtrak. Amtrak reinstituted , automobile and passenger transportation service October 30, 1983. Director of Compensation and Certification In a subsequent letter of January 26, 1984, Ms. Lehman stated that: Please be advised further that Auto-Train has no assets at this time which could be characterized as railroad property or which could be used in the operation of a railroad. The Trustee of Auto-Train sold its Sanford, Florida terminal facilities to Amtrak on October 20, 1983 and its last piece of rolling stock to a scrap dealer on December 14, 1983. The only remaining assets are the filing cabinets, desks and other such office furniture and equipment utilized by Auto-Train's two employees in performing their bookkeeping functions. "The Auto-Train estate is being kept alive at this time for the sole purpose of pursuing claims of the estate. Prosecution of some of these claims may entail extended litigation and, therefore, the estate may be open for a year or more. At no time, however, will Auto-Train be involved in any way with the provision of rail service or ever again be in the position of owning railroad equipment or facilities." In Legal Opinion L-76-577, the General Counsel held that where Trustee for the Erie Lackawanna Railway had conveyed all locomotives and rolling stock and the greater part of the company's rail properties (the balance to be operated by state transportation agencies), and where the office of the Trustee would continue in existence with a staff of 31 non-railroad employees for an undetermined period for the purpose of liquidation of the remaining non-railroad properties, the Erie Lackawanna ceased to be an employer under the Acts from the date of the conveyance. Similarly, Legal Opinion L-80-102 held that the Penn Central Corporation was no longer an employer because it had ceased all rail operations, and only retained ownership of some rail lines because it was prohibited from abandoning them as long as these lines were operated by others. Based on the evidence presented, it appears that while Auto-Train ceased rail operations in 1981, it did not dispose of its facilities for interstate transportation of passengers and property until some time later. Accordingly, it is my opinion that Auto-Train ceased to be an employer under the Railroad Retirement and Railroad Unemployment Insurance Acts effective with the day it disposed of its last railroad asset, December 14, 1983. Director of Compensation and Certification An appropriate Form G-215 giving effect to the foregoing is attached. i Steven A. Bartholow i Attachment KTB:jef 8167A/81A.
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