Amtrak 2013 Annual Report Download - page 72

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National Railroad Passenger Corporation and Subsidiaries (Amtrak)
Notes to Consolidated Financial Statements (continued)
1411-1359280 33
6. Preferred and Common Stock (continued)
As of September 30, 2013 and 2012, 10,000,000 shares of $10 par value common stock were
authorized, of which 9,385,694 shares were issued and outstanding. The common stockholders,
who acquired their stock from four railroads whose intercity rail passenger operations Amtrak
assumed in 1971, have voting rights for amendments to Amtrak’ s Articles of Incorporation
proposed by the Board of Directors. The Act also required Amtrak to redeem at fair market value
the shares of common stock outstanding as of December 2, 1997, by the end of fiscal year 2002.
Amtrak has discussed the redemption of the shares with the owners, but there has been no
resolution of this matter between Amtrak and the owners. Amtrak believes that the fair market
value of the common stock is zero. Nevertheless, in an effort to comply with the Act, Amtrak
made an offer to the stockholders to redeem the stock for cash at a price of $0.03 per share. By a
letter, dated November 2, 2000, counsel for the four common stockholders responded to Amtrak
and rejected the offer as inadequate.
In May 2008, American Premier Underwriters, Inc. (“APU”) owner of 55.8% of Amtrak’ s
common stock through its corporate predecessor, Penn Central, filed a lawsuit in federal court in
Cincinnati, Ohio, asserting that Amtrak has “eroded” the value of the common stock. APU is
seeking $52.0 million and 40 years of interest (see Note 11).