INVESTOR PARTNERS TO NOMINATE FIVE TO CSX BOARD: CSX Corp. shareholders 3G Capital Partners Ltd. and The Children's Investment Fund Management LLP said they have partnered to jointly nominate a minority slate of 5 directors to the railroad operator's board. The action was disclosed in Securities and Exchange Commission filings. The group owns about 8.3 percent of CSX's outstanding common stock. The members also hold derivative securities with economic interest in an additional 11.8 percent of outstanding shares. Those being nominated are TCI Managing Partner Christopher Hohn, 3G Managing Director Alexandre Behring, Gilbert Lamphere, managing director of private investment firm Lamphere Capital Management; Timothy O'Toole, managing director of the London Underground; and Gary Wilson, former chairman of Northwest Airlines. The slate will be up for election at the company's 2008 annual shareholders meeting. [Brotherhood of Locomotive Engineers & Trainmen, 12-21-07, from Associated Press report]
CARL ICAHN BOOSTS STAKE IN CSX: Investor Carl Icahn got U.S. approval to boost his stake in CSX Corp., the nation's third-largest railroad, to as much as 8.5 percent. The Federal Trade Commission granted Icahn early termination of an antitrust review, which CSX said would let him and his companies purchase as much as $1.6-billion of its stock. Icahn said he boosted his CSX stake because of the actions of fellow activist investors TCI Fund Management LLP and 3G Capital Partners Ltd., which are seeking five seats on the railroad's board. "We believe the dissidents will enhance value,'' Icahn said. "There's absolutely no downside'' in electing their slate to the board of Jacksonville, Florida-based CSX. [United Transportation Union, 2-21-08, from Bloomberg News Service report]
CSX FILES SUIT AGAINST TCI AND 3G HEDGE FUNDS: CSX Corporation has filed a lawsuit against The Children's Investment Fund ("TCI") and 3G Capital Partners ("3G") alleging violations of federal securities laws. CSX filed a federal lawsuit in the U.S. District Court for the Southern District of New York alleging violations of federal securities laws, including violations of Section 13(d) of the Securities Exchange Act of 1934. The lawsuit alleges, among other things, that TCI has employed swap agreements in order to evade the filing requirements of Section 13(d), and that TCI's disclosures concerning its 11.5 percent swap position in CSX shares are materially misleading because they fail to disclose that, by virtue of agreements, understandings or relationships with TCI, swap counterparties intend to vote CSX shares in accordance with TCI's wishes. The lawsuit further alleges that TCI and 3G's disclosures concerning their formation of a Section 13(d) group are false and misleading and, therefore, material information that the investing public should have regarding the group and its intentions with respect to the Company is currently unavailable. [CSX, 3-17-08]
CHILDREN'S INVESTMENT FUND ALLEGES INSIDER TRADING AT CSX: The hedge fund pursuing strategic reform at CSX Corp. has leveled allegations of insider trading against the chairman and board members of the U.S. railroad operator. The Children's Investment Fund made the allegations in a 62-page federal court filing, countering charges made last month by CSX against the London-based hedge fund. CSX immediately responded that TCI's "counterclaims are without merit," though it didn't provide comment on the individual charges made against its officers. TCI is seeking to nominate a slate of five new directors to the 12-member board at a shareholders' meeting on June 25. The fund, which has a history of shareholder activism in Europe, has challenged capital allocation and investment priorities at CSX. [Brotherhood of Locomotive Engineers & Trainmen, 4-4-08, from Dow Jones report]
SECURITIES & EXCHANGE COMMISSION REJECTS CSX'S ARGUMENTS IN TCI LAWSUIT: The U.S. Securities and Exchange Commission has weighed in on a legal dispute between CSX Corp. and two money managers trying to wage a proxy fight at the company, saying it disagrees with the railroad's interpretation of disclosure rules. In a letter to U.S. District Judge Lewis Kaplan in New York, who is expected to issue a decision soon on the litigation, the SEC deputy director for corporation finance said his office disagreed with CSX's interpretation of disclosure rules around equity swap transactions. [Brotherhood of Locomotive Engineers & Trainmen, 6-5-08, from Reuters report]
CSX SHAREHOLDER VOTE LEFT IN LIMBO: A battle over the future of one of the nation's largest railroads was joined June 26 in a rail yard on the outskirts of New Orleans. For more than four hours, under a white tent surrounded by walls of freight cars, executives of the CSX Corporation sought to persuade shareholders to rebuff an attempt by two powerful hedge funds to gain several seats on the company's board through a proxy fight. After the shareholders cast their votes, the funds, which together control at least 8.7 percent of CSX, claimed four of five contested seats and said that CSX had held the voting open in the hope of wrangling a few more votes. But CSX said that the vote was too close to call and that the results would take a month to tally and certify. [Brotherhood of Locomotive Engineers & Trainmen, 6-26-08, from New York Times website report]
HEDGE FUND CANDIDATES WIN FOUR SEATS ON CSX BOARD: CSX Corp. says preliminary results of the railroad's contentious board vote show that four out of five directors nominated by activist hedge fund shareholders TCI and 3G Capital have been elected to its board. The company said shareholders elected TCI Founder Chris Hohn, 3G Managing Director Alexandre Behring, Gilbert H. Lamphere and Timothy T. O'Toole. The only candidate nominated by the activist shareholders not elected was Gary Wilson, a former chairman at Northwest Airlines Corp. [Brotherhood of Locomotive Engineers & Trainmen, 7-16-08, from Associated Press report]
CSX SEATS TWO DISSIDENTS TO BOARD: CSX Corp. announced July 25 that it will immediately seat two nominees of a dissident shareholder group to its board of directors. But two other candidates will have to wait. An independent auditor reported last week that four nominees of The Children's Investment Fund Management LLP and 3G Capital Partners Ltd. won election to CSX's 12-member board, according to preliminary results. But at a shareholders meeting at CSX's Jacksonville headquarters, Chairman and CEO Michael Ward said the election of two of those nominees is still too close to confirm. Besides seeking confirmation of the vote by independent inspector IVS Associates Inc., CSX is also challenging the legality of some of the TCI and 3G votes in a court case that is pending at the U.S. Court of Appeals for the 2nd Circuit. CSX has invited 3G managing director Alex Behring and former railroad executive Gil Lamphere, another TCI/3G nominee, to join the board immediately. They have enough votes regardless of the IVS review or the court's decision. CSX adjourned the very brief meeting and continued it until Sept. 24. [Brotherhood of Locomotive Engineers & Trainmen, 7-26-08, from The Florida Times-Union website report]
APPEALS COURT UPHOLDS RULING ON CSX SHARE VOTES: A federal appeals court has backed a lower court's decision not to bar two hedge funds locked in a legal battle with CSX Corp. from voting their shares in the railroad at the company's annual meeting in June, Reuters reports. The U.S. Court of Appeals for the Second Circuit said in a brief summary order it had affirmed the lower court decision not to block the voting of those shares. It said it was deciding this issue alone at this time, not the other parts of the litigation. A U.S. District Court judge in Manhattan ruled in June that while he found that the funds, the Children's Investment Fund and 3G Capital Partners, had violated securities law by evading disclosure obligations related to their stakes in CSX, they were allowed to vote their shares at the June meeting where they put forward their own slate of director candidates. [United Transportation Union, 9-15-08, from Reuters report]
CSX FINALIZES BOARD OF DIRECTORS ELECTION: After waging a long, bitter fight against dissident investors led by two activist hedge funds, CSX has concluded its June 25 shareholders election that put four minority directors on its 12-person board. CSX had waited to conclude the annual board meeting and election until after an appeals court ruled on its challenge to some shares used to elect two of those dissidents. But CSX lost the appeal, invited the two remaining minority directors to take office and officially concluded the election on Sept.24. Christopher Hohn, managing partner of The Children's Investment Fund Management, and former Conrail CEO Timothy O'Toole joined the board. They joined two other directors who had already taken their seats out of the five-person slate the dissidents had nominated. [Brotherhood of Locomotive Engineers & Trainmen, 9-25-08, from Traffic World website report]
CSX SHAREHOLDER SUIT SETTLED: Two hedge funds have agreed to pay CSX a total of $11-million in settlement of a shareholder lawsuit alleging violations of securities laws. TCI, which manages The Children's Master Investment Fund, will pay $10-million and 3G Capital Partners will pay $1-million. If the settlement receives the approval of a federal court in New York, where the civil action was initiated, a countersuit alleging that CSX violated its corporate insider trading policy will be dismissed. The hedge funds waged a proxy fight this year that gave them four seats on the CSX board. [RailwayAge.com 12-17-08]
HEDGE FUNDS AGREE TO PAY CSX $11-M: Railroad operator CSX moved closer to collecting $11-million from two hedge funds that successfully fought to get four directors on the CSX board last year. The company said a federal court in New York gave preliminary approval to a settlement to end a shareholder lawsuit. Before it becomes final and the rail company collects the cash, the court will hold a March 5 hearing. [Brotherhood of Locomotive Engineers & Trainmen, 1-12-09, from Traffic World website report]
NEW CSX BOARD MEMBER WON'T SEEK REELECTION: After waging a nearly year-long proxy fight to gain a seat on CSX Corp.'s board of directors, the managing partner of the Children's Investment Fund will not seek reelection to the board at this year's annual meeting. Christopher Hohn was one of four representatives nominated by hedge funds TCI and 3G Capital Partners Ltd. to win election to CSX's 12-member board in 2008. With Hohn not seeking reelection, CSX has decided to reduce the size of its board to 11 members. [United Transportation Union, 2-13-09, from Jacksonville.com report]
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