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10/23/2003



Rail News: M&A

Delaware court grants KCS preliminary injunction preventing TMM from violating TFM acquisition agreement


On Oct. 22, Kansas City Southern announced the Delaware Court of Chancery granted the railroad a preliminary injunction "to preserve the status quo" pending resolution of its dispute with Grupo TMM S.A. over the sale of TFM S.A. de C.V., according to a prepared statement

The court soon will issue a written order enjoining TMM from taking any action that would violate terms of a TFM acquisition agreement signed in April by KCS and TMM until they resolve their dispute.

KCS plans to initiate arbitration to resolve the dispute after a 60-day informal negotiation period expires Oct. 29. Arbitration proceedings would be held in New York City, and governed by Delaware law and American Arbitration Association rules, KCS officials said.

TMM had agreed to sell its 38.4 percent stake in TFM to KCS — a major part of the Class I's NAFTA Rail plan — but TMM shareholders, led by majority stockholders TMM chairman Jose Serrano and TMM CEO Javier Segovia, rejected the deal in August.

KCS officials believe the acquisition agreement still is valid and in effect until Dec. 31, 2004.


Contact Progressive Railroading editorial staff.

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