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August 11, 1982

In The Matter of: READING COMPANY, Debtor

The opinion of the court was delivered by: DITTER




 1. The Reading Company is a Pennsylvania corporation having its corporate headquarters in Plymouth Meeting, Pennsylvania. For many years prior to April 1, 1976, Reading's principal business was as an interstate railroad, transporting both passengers and freight. From November 21, 1971, until January 1, 1981, Reading was in reorganization pursuant to section 77 of the Bankruptcy Act, 11 U.S.C. ยง 205.

 2. Trailer Train is a Delaware corporation, having been incorporated in Delaware on November 9, 1955. The Company's corporate headquarters are located in Chicago, Illinois.

 3. Trailer Train owns, operates, and maintains a pool of standardized railroad flat cars used by railroads in the United States under a pooling agreement entered into between it and its shareholders with the approval of the Interstate Commerce Commission ("ICC"). (Stipulation of Facts ("Stip.") No. 4)

 4. As of December 31, 1979, the Trailer Train flat car pool consisted of 87,494 intermodal, autorack, and special use cars.

 As of June, 1979, Trailer Train owned or leased approximately 92 percent of all intermodal flat cars, and approximately 87-88 percent of all automotive rail cars, used in rail service in the United States. (Stip. No. 6)

 5. Reading owns 500 of the 20,500 shares, or 2.44 percent of the outstanding capital stock of Trailer Train. (Stip. No. 3)

 6. The remaining capital stock of Trailer Train is owned by 30 operating railroads, the trustees of the estate of the Erie Lackawanna Railway Company, and Transway International Corp., a diversified freight forwarding company. The 30 operating railroads represent approximately 89 percent of the mileage of the class 1 railroads in the United States. (Stip. No. 5; Tr. 122)

 7. The shareholders of Trailer Train, and the percentage of outstanding stock held by each, are:

2.44% -- The Atchison, Topeka and Sante Fe Railway Company;
2.44% -- The Baltimore and Ohio Railroad Company;
2.44% -- Robert W. Meserve and Benjamin H. Lacy, Trustees -- Boston and Maine Corporation;
7.32% -- Burlington Northern Inc.;
2.44% -- Central of Georgia Railroad Company;
2.44% -- The Chesapeake and Ohio Railway Company;
4.88% -- Chicago and Northwestern Transportation Company;
2.44% -- Stanley Hillman, Trustee -- Chicago, Milwaukee, St. Paul and Pacific Railroad Company;
2.44% -- William Gibbons -- Trustee -- Chicago, Rock Island and Pacific Railroad Company;
4.88% -- Consolidated Rail Corporation;
2.44% -- The Denver and Rio Grande Western Railroad Company;
2.44% -- Detroit, Toledo and Ironton Railway Company;
2.44% -- Thomas F. Patton and Ralph S. Tyler, Jr., Trustees -- Erie Lackawanna Railway;
2.44% -- Florida East Coast Railway Company;
2.44% -- The Kansas City Southern Railway Company;
2.44% -- Louisville and Nashville Railroad Company;
2.44% -- Missouri-Kansas-Texas Railroad Company;
4.88% -- Missouri Pacific Railroad Company;
4.88% -- Norfolk and Western Railway Company;
2.44% -- Norfolk and Western Railway Company, Lessee of Wabash Railroad Co. Under lease dated March 1, 1961, as Supplemented and Amended;
2.44% -- The Reading Company;
2.44% -- Richmond, Fredericksburg and Potomac Railroad Company;
2.44% -- St. Louis-San Francisco Railway Company;
2.44% -- St. Louis Southwestern Railway Company;
4.88% -- Seaboard Coast Line Railway Company;
2.44% -- Southern Pacific Transportation Company;
2.44% -- Southern Railway Company;
2.44% -- Toledo, Peoria and Western Railroad Company;
2.44% -- Transway International Corporation;
2.44% -- Union Pacific Railroad Company;
2.44% -- Western Maryland Railway Company; and
2.44% -- The Western Pacific Railroad Company.

 (Stip. No. 15).

 8. Trailer Train was incorporated in 1955 by the Pennsylvania Railroad Company, its then affiliate, Norfolk and Western Railway Company, and Rail Trailer Company, a consulting firm to the railroad industry. (Stip. No. 10; Tr. 118).

 9. Trailer Train added new shareholders from 1956 to 1964 as follows:

1956: St. Louis-San Francisco Railway Co; Missouri-Kansas-Texas Railroad; Missouri-Pacific Railroad Co.; Chicago, Burlington & Quincy Railroad; Wabash Railroad Company; Boston & Maine.
1957: Chicago & Northwestern Railway.
1958: Baltimore & Ohio Railroad.
1959: Illinois Central Gulf, Mobile & Ohio; Louisville-Nashville; Atlantic Coast Line; Seaboard Air Line; Western Pacific; New York, Chicago ...

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