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Rail News: Financials

Appellate court ruling allows TCI/3G to seat all four election winners on CSX's board


Nearly three months after stockholders voted for CSX Corp. board members at the Class I's annual shareholders meeting, the results of the elections are written in stone.

Yesterday, the U.S. Court of Appeals for the Second Circuit in New York upheld a lower court's ruling to allow the Children's Investment Fund Management L.L.P. (TCI) and 3G Capital Partners Ltd. to vote their shares at the meeting, which was held June 25. As a result, all four of TCI/3G's nominees that won election at the meeting soon will be seated on the board.

In addition to 3G Managing Director Alexandre Behring and Lamphere Capital Management Managing Director Gilbert Lamphere — who CSX invited to join the board in late July — TCI founder Christopher Hohn and London Underground Managing Director Timothy O'Toole will join the Class I's board at a reconvened annual meeting Sept. 24, when voting results will be received and accepted, CSX said.

Hohn and O'Toole will succeed William Richardson and Frank Royal, each of whom will resign.

"We look forward to working together with the full board to continue delivering outstanding results for our customers and shareholders," said CSX Chairman, President and Chief Executive Officer Michael Ward in a prepared statement.

TCI and 3G officials expressed satisfaction with the court's decision.

"It is time for the entire duly elected board, including Chris Hohn and Tim O'Toole, to get to work and make progress on the shareholder mandate they received in June," they said.

CSX and TCI/3G had been engaged in a proxy fight for more than eight months, during which time the Class I sought a court ruling to prevent the hedge funds from voting their entire shares and TCI/3G accused CSX of employing delay tactics with election processes.

Contact Progressive Railroading editorial staff.

More News from 9/16/2008