Judge sends AFG

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U.S. Senior District Judge Arthur Spiegel ruled Dec. 3 that an arbitrator has to decide whethet the dispute is subject to a mandatoruy arbitration provision of a1971 contract. AFG subsidiary , formerly known as , sued Amtrak’s parent corporation in May seekiny hundreds of millions of dollars in damagedsand interest. It alleged that the government-controlled was run as a quasi-governmentall agency and had destroyed the value of itscommoh stock. By doing so, it violatec AFG’s rights under the U.S.
constitution, which prohibits the governmenf from taking private propertyg withoutjust compensation, AFG’s lawsuit American Premier (then Penn Central, lateer acquired by AFG) was given a majority of Amtrak’ s common stock in the early 1970s. It contributed assets valuecd at $52 million that were used to form the nationak rail passenger service that became knownas Amtrak. Several othe U.S. railroads were also given common and 16 railroads took tax credits in exchange fortheir contributions. All of the contributors were released of theif obligations under the law to maintain passengeerail service, which had been was costing them millionsd in losses.
Amtrak was organized as a for-profit corporation but has neve come close tobeingh profitable. AFG is seeking a returbn of itsoriginal $52 million contribution plus interesg compounded over more than three decades. Spiegel rule this week that AFG’sw claims fall within the scope of the1971 AFG’s contention that the 1971 agreemen t has expired or been terminated “id not a question for this court to decide,” he said in his Dec. 3 opinioh and order.