
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, December 20, 1994                   TAG: 9412200068
SECTION: BUSINESS                    PAGE: B-7   EDITION: METRO 
SOURCE: Associated Press GREENSBORO, N.C.
DATELINE:                                 LENGTH: Short

N.C. RAILROAD SUED OVER LEASING TRACK TO NS

A New York man has charged in a federal lawsuit that private shareholders of the North Carolina Railroad Co. will be shortchanged under a proposed new lease between the state-controlled railroad and Norfolk Southern Corp.

The lawsuit by Fred Werner asks the U.S. Eastern District Court in Raleigh to set aside the lease and award damages to private shareholders. The amount of damages being sought was not specified.

North Carolina Railroad owns 317 miles of track that have been leased since 1895 to railroads that now are operations of Norfolk Southern. The state owns about 3 million shares of NCR's stock and private investors own about 1.1 million shares.

The current lease, which expires at the end of this year, pays about $600,000 a year but NCR directors recently announced tentative agreement on a new 15-year lease paying $8 million a year.

But Werner called this ``grossly inadequate'' and asked the court to order lease negotiations opened ``to the market place so as to obtain a rental ... on fair, equitable and commercial terms.''

He contended the state wants the rent kept low to stimulate economic development and can achieve this goal since the governor appoints a majority of the 15 directors.

Werner described himself in the suit as a shareholder and resident of New York. His lawsuit names North Carolina Railroad, the 10 state-appointed directors, Norfolk Southern and Gov. Jim Hunt as defendants.

The state had no comment and Norfolk Southern earlier declined to comment on the dispute.

by CNB