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In re Central Railroad Co.

decided as amended november 2 1973.: September 20, 1973.

IN THE MATTER OF THE CENTRAL RAILROAD COMPANY OF NEW JERSEY, DEBTOR. APPEAL OF COMMONWEALTH OF PENNSYLVANIA AND PENNSYLVANIA PUBLIC UTILITY COMMISSION, APPELLANTS


Reargued September 12, 1973. APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY D.C. No. B 401-67.

Van Dusen and Weis, Circuit Judges. On Reargument: Van Dusen, Rosenn and Weis, Circuit Judges.

Author: Per Curiam

Opinion OF THE COURT

This appeal challenges the right of a Section 77 reorganization court to deny the Commonwealth of Pennsylvania and its Public Utility Commission leave to file an action in the United States District Court for the Middle District of Pennsylvania to review orders of the Interstate Commerce Commission, concerning tariff routings and authorizing the abandonment by the reorganization trustee of certain lines in Pennsylvania and western New Jersey.*fn1

After the debtor had lost more than 100 million dollars from 1958-1971, the trustee presented in 1971 a "blueprint for survival" to deal with a severe liquidity crisis which threatened termination of all its operations. An important part of this "blueprint" involved abandonment of the debtor's unprofitable operations in Pennsylvania*fn2 and reduction of the debtor's operations to six heavily populated and industrialized north-central New Jersey counties. On May 7, 1971, and thereafter the trustee, pursuant to section 77(o) of the Bankruptcy Act (11 U.S.C. § 205 (o)), sought the approval of the reorganization court for abandonment of various portions of lines operated by the debtor, including those in Pennsylvania, and these applications eventually resulted in Orders Nos. 410, 451, and 514 approving abandonments. As a result of the May 7, 1971, and subsequent applications, the reorganization court authorized the trustee to file requests for authorizations with the Commission for such abandonments, which requests were granted on August 20, 1971, and May 26, 1972. On December 20, 1971, the reorganization court issued Order 445, directing the trustee to suspend all CNJ operations in Pennsylvania by April 1, 1972, pending the Commission's final decision on the abandonment application, and enjoining all parties from instituting or maintaining in any other court any action affecting CNJ operations in Pennsylvania, or the abandonment thereof, without the permission of the reorganization court. This court affirmed Order 445, In the Matter of Central Railroad Company of New Jersey, Debtor, 455 F.2d 989 (3d Cir. 1972). On May 26, 1972, the ICC granted the debtor permission to abandon all its lines in Pennsylvania, subject to certain conditions. Central Railroad Company of New Jersey-Abandonment, 342 I.C.C. 277 (1972).*fn3 After hearing, the reorganization court, by order No. 514 dated July 5, 1972, authorized (a) compliance by the trustee with such conditions, and (b) the abandonments of the Pennsylvania lines.*fn4 No appeal was taken from such order.*fn5 However, by motion returnable December 11, 1972, appellants sought leave to file the action described in the first sentence of this opinion.

We have concluded that the above-quoted language of order No. 550 (note 1) should be affirmed. On the facts presented by this record, including the failure of appellants to appeal from order No. 514 and the affirmance of order No. 445 by this court (455 F.2d 989, supra) resulting in the abandonment of the Pennsylvania lines, the reorganization court had the authority to protect its jurisdiction by precluding review of the abandonment of the Pennsylvania lines in any other district court. See 28 U.S.C. §§ 1336(b) and 1398(b);*fn6 New Haven Inclusion Cases, 399 U.S. 392, 420-422, 26 L. Ed. 2d 691, 90 S. Ct. 2054 (1970); In re Penn Central Transportation Company, 446 F.2d 1109, 1111-1112 (3d Cir. 1971); Bondholders Protective Committee, supra 432 F.2d at 270-71; In re Huntingdon & Broad Top Mt. R.R. & Coal Co., 213 F.2d 411, 416-17 (3d Cir. 1954), where Judge Biggs made the pertinent observation at 417, "It is time that this chapter in the history of [the railroad] is brought to a close."

That part of order No. 550 quoted in note 1 of this opinion ...


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