§905 Employee or Employee-shipper Ownership Plan

Summary

Associations made up of national railway labor groups, employee coalitions, and shippers can file one plan by December 1, 1979 to turn all or most of the Milwaukee Railroad into a company owned by employees or employees and shippers. The plan must show how to make the change and include a full check of whether the railroad can pay its own way. The Interstate Commerce Commission must approve the plan within 30 days if it finds it workable. To be workable the plan must show adequate public and private financing (including likely claims and any Federal, State, or local programs available as of January 1, 1980), be fair to the railroad’s estate, be ready to start by April 1, 1980, allow the railroad to run on a self-supporting basis, and include a review of operations plus labor-management agreements to raise productivity while keeping safe, adequate service. If the Commission approves, it sends its finding to the bankruptcy court. The court must hold a hearing and decide within 10 days whether the plan is fair to the estate; the Commission’s finding can be overturned only by clear and convincing evidence. If both the Commission and the court approve, the plan must be put into effect by April 1, 1980. The railroad trustee must promptly give the plan writers recent reports on physical condition and traffic, revenue, marketing, and other data needed to set the acquisition cost. That information can only be used to prepare the plan and must not be given to competitors or, unless needed, to customers.