UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended: December 28, 2001 Commission file number: 0-25567
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CSX Trade Receivables Corporation on behalf of the
CSXT Trade Receivables Master Trust
(Issuer in respect of the CSXT Trade Receivables Master Trust
6.00% Trade Receivables Participation Certificates, Series 1998-1)
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(Exact name of registrant as specified in its charter)
Delaware 59-3168541
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Route 688
P. O. Box 87
Doswell, Virginia 23047
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (804) 876-3220
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Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
CSXT Trade Receivables Master Trust 6.00% Trade Receivables
Participation Certificates, Series 1998-1
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes (X) No ( )
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. (X)
State the aggregate market value of the voting stock held by non-affiliates of
the Registrant. Not Applicable.
PART I
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Item 1. Business.
Omitted pursuant to a no-action letter dated February 4, 1994 (the
"No-Action Letter"), issued by the Commission staff with respect to certain of
the Registrant's reporting requirements pursuant to Section 13 or 15(d) of the
Act.
Item 2. Properties.
Pursuant to the No-Action Letter, reference is made to the Annual
Certificates of Servicer referred to in Items 8 and 14 hereof.
Item 3. Legal Proceedings.
New Orleans Tank Car Fire
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In September 1997 a state court jury in New Orleans, Louisiana
returned a $2.5 billion punitive damages award against CSXT. The award was made
in a class-action lawsuit against CSX Transportation, Inc. (CSXT). The award was
made in a class action lawsiut against a group of nine companies based on
personal injuries alleged to have arisen from a 1987 tank car fire.
In October 1997 the Louisiana Supreme Court set aside the punitive
damages judgment, ruling the judgment should not have been entered until all
liability issues were resolved. In February 1999 the Louisiana Supreme Court
issued a further decision authorizing and instructing the trial court to enter
individual punitive damage judgments in favor of the 20 plaintiffs who had
received awards of compensatory damages.
On November 5, 1999, the trial court issued an opinion that granted
CSXT's motion for judgment notwithstanding the verdict and effectively reduced
the amount of the punitive damages verdict from $2.5 billion to $850 million. A
judgment reflecting the $850 million punitive award has been entered against
CSXT. CSXT has obtained and posted an appeal bond.
In June 2001 the Louisiana Court of Appeal for the Fourth Circuit
affirmed the judgment of the trial court, which reduced the punitive damages
verdict from $2.5 billion to $850 million. CSXT moved the Louisiana Fourth
Circuit Court for rehearing of certain issues raised in its appeal; that motion
was denied in August 2001.
CSXT then filed with the Louisiana Supreme Court an application that
the court take jurisdiction over and reverse the 1997 punitive damages award.
The Louisiana Supreme Court's jurisdiction in this case is discretionary.
Opposing papers were filed by counsel in October 2001. If the Louisiana Supreme
Court takes jurisdiction of the case, an additional round of briefing and oral
argument may precede any decision by the court.
On November 21, 2001, CSXT announced that it had reached a proposed
settlement of the litigation, subject to a fairness hearing and court approval.
The amount to be paid by CSXT under the proposed settlement is $220 million to
resolve all claims arising out of the 1987 fire and evacuation (whether or not
included in the present class-action lawsuit). A preliminary settlement
agreement between CSXT and the plaintiffs' management committee on behalf of the
plaintiff case has been preliminarily approved by the trial court, and has been
publicly filed. CSXT incurred a charge of $60 million before tax, $37 million
after tax, in the fourth quarter of 2001 to account for the expense of the
settlement, net of insurance recoveries. The trial court has set April 2, 2002,
as the date for a fairness hearing at which the court will consider final
approval of the settlement. CSXT expects that the settlement will be finally
approved shortly after that
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hearing. The Louisiana Supreme Court has ordered that the proceeding before it
be deferred in light of the proposed settlement.
If the proposed settlement is not approved and the litigation thereby
disposed of, CSXT intends to continue to pursue an aggressive legal strategy,
including the pursuit of the proceedings in the Louisiana Supreme Court and, if
necessary, proceedings before the United States Supreme Court.
STB Proceeding
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On December 21, 2001, Duke Energy Corporation filed a complaint before
the US Surface Transportation Board alleging that certain CSXT common carrier
coal rates are unreasonably high. A similar complaint was filed by Duke against
Norfolk Southern. At this time the outcome of the proceeding against CSXT is
uncertain and would only apply to billings subsequent to 2001. CSXT is pursuing
an aggressive legal strategy in its defense against this complaint.
Other Legal Proceedings
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A number of other legal actions are pending against CSXT in which
claims are made in substantial amounts. While the ultimate results of these
legal actions cannot be predicted with certainty, management does not currently
expect that the resolution of these matters will have a material adverse effect
on CSXT's consolidated results of operations, financial position or cash flows.
CSXT is also party to a number of actions, the resolution of which could result
in gain realization in amounts that could be material to results of operations
in the quarter received.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
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PART II
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Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
(a) To the best knowledge of the Registrant, there is no established
public trading market for the CSX Trade Receivables Master Trust
6.00% Trade Receivables Participation Certificates, Series 1998-1
(the "Certificates").
(b) The Certificates are represented by one or more certificates
registered in the name of Cede & Co. ("Cede"), the nominee of The
Depository Trust Company ("DTC").
(c) Omitted pursuant to the No-Action Letter.
Item 6. Selected Financial Data.
Omitted pursuant to the No-Action Letter.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operation.
Omitted pursuant to the No-Action Letter.
Item 8. Financial Statements and Supplementary Data.
CSXT, as servicer (in such capacity, the "Servicer") has delivered the
Annual Certificate of Servicer to the Trustee, a copy of which is attached
hereto as Exhibit 99.1. The certificate was provided pursuant to Section 3.06 of
the Amended and Restated Pooling and Servicing Agreement dated as of October 27,
1993, as such Agreement has been amended and supplemented (the "Agreement").
Pursuant to Section 3.07 of the Agreement, Ernst & Young LLP has
furnished a report on management's assertion regarding the compliance of the
Servicer with certain terms and conditions in the Agreement and on the
comparison of mathematical calculations of amounts set forth in the
Certificateholders' Distribution Date Statements with the Servicer's computer
records, with respect to the Certificates. A copy of the report is attached
hereto as Exhibits 99.2.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
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PART III
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Item 10. Directors, Executive Officers, Promoters and Control Persons of the
Registrant.
Omitted pursuant to the No-Action Letter.
Item 11. Executive Compensation.
Omitted pursuant to the No-Action Letter.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
(a) As of December 28, 2001:
Amount and
Nature of
Name and Address of Beneficial Percent
Note Security Beneficial Owner Ownership of Class
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(1) 6.00% Trade Receivables Participation Cede & Co. 100% 100%
Certificates, Series 1998-1 c/o The Depository Nominee of
Trust Company The
55 Water Street Depository
New York, NY 10041 Trust
Company
(1) The Certificates are represented by one or more certificates registered in
the name of Cede, the nominee of DTC. An investor holding an interest in
the Trust is not entitled to receive a certificate representing such
interest except in limited circumstances. Accordingly, Cede is the sole
holder of record of Certificates, which it holds on behalf of brokers,
dealers, banks, and other direct participants in the DTC system. Such
direct participants may hold Certificates for their own accounts or for the
accounts of their customers.
(b) Omitted pursuant to the No-Action Letter.
(c) Omitted pursuant to the No-Action Letter.
Item 13. Certain Relationships and Related Transactions.
There have not been, and there are not currently proposed, any
transactions or series of transactions, to which either the Registrant, CSXT, as
Servicer, or the Trustee, on behalf of the Trust, is a party with any
Certificateholder who owns of record or beneficially more than five percent of
the Certificates. Information regarding servicing compensation received by CSXT
is set forth in the monthly Certificateholders' Distribution Date Statements
filed on Form 8-K, as referenced under Item 14 hereof.
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PART IV
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Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) Exhibits.
24.1 Powers of Attorney of Messrs. Baggs, Boor,
Goolsby, and Grandis as Directors and/or Officers
of CSX Trade Receivables Corporation.
99.1 Annual Certificate of Servicer with respect to
the CSXT Trade Receivables Master Trust 6.00%
Trade Receivables Participation Certificates,
Series 1998-1, prepared by CSXT pursuant to
Section 3.06 of the Agreement.
99.2 Report of independent Certified Public
Accountants with respect to the CSXT Trade
Receivables Master Trust 6.00% Trade Receivables
Participation Certificates, Series 1998-1,
prepared by Ernst & Young LLP pursuant to Section
3.07 of the Agreement.
(b) Reports on Form 8-K.
Date of Form 8-K Description of Form 8-K
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January 25, 2001 Submitted a copy of Certificateholders'
Distribution Date Statement dated
January 25, 2001 for the CSXT Trade
Receivables Master Trust 6.00% Trade
Receivables Participation Certificates,
Series 1998-1.
February 26, 2001 Submitted a copy of Certificateholders'
Distribution Date Statement dated
February 26, 2001 for the CSXT Trade
Receivables Master Trust 6.00% Trade
Receivables Participation Certificates,
Series 1998-1.
March 26, 2001 Submitted a copy of Certificateholders'
Distribution Date Statement dated March
26, 2001 for the CSXT Trade Receivables
Master Trust 6.00% Trade Receivables
Participation Certificates, Series
1998-1.
April 25, 2001 Submitted a copy of Certificateholders'
Distribution Date Statement dated April
25, 2001 for the CSXT Trade Receivables
Master Trust 6.00% Trade Receivables
Participation Certificates, Series
1998-1.
May 25, 2001 Submitted a copy of Certificateholders'
Distribution Date Statement dated May
25, 2001 for the CSXT Trade Receivables
Master Trust 6.00% Trade Receivables
Participation Certificates, Series
1998-1.
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June 25, 2001 Submitted a copy of Certificateholders'
Distribution Date Statement dated June
25, 2001 for the CSXT Trade Receivables
Master Trust 6.00% Trade Receivables
Participation Certificates, Series
1998-1.
July 25, 2001 Submitted a copy of Certificateholders'
Distribution Date Statement dated July
25, 2001 for the CSXT Trade Receivables
Master Trust 6.00% Trade Receivables
Participation Certificates, Series
1998-1.
August 27, 2001 Submitted a copy of Certificateholders'
Distribution Date Statement dated August
27, 2001 for the CSXT Trade Receivables
Master Trust 6.00% Trade Receivables
Participation Certificates, Series
1998-1.
September 25, 2001 Submitted a copy of Certificateholders'
Distribution Date Statement dated
September 25, 2001 for the CSXT Trade
Receivables Master Trust 6.00% Trade
Receivables Participation Certificates,
Series 1998-1.
October 25, 2001 Submitted a copy of Certificateholders'
Distribution Date Statement dated
October 25, 2001 for the CSXT Trade
Receivables Master Trust 6.00% Trade
Receivables Participation Certificates,
Series 1998-1.
November 26, 2001 Submitted a copy of Certificateholders'
Distribution Date Statement dated
November 26, 2001 for the CSXT Trade
Receivables Master Trust 6.00% Trade
Receivables Participation Certificates,
Series 1998-1.
December 26, 2001 Submitted a copy of Certificateholders'
Distribution Date Statement dated
December 26, 2001 for the CSXT Trade
Receivables Master Trust 6.00% Trade
Receivables Participation Certificates,
Series 1998-1.
(c) Omitted pursuant to the No-Action Letter.
(d) Omitted pursuant to the No-Action Letter.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CSXT TRADE RECEIVABLES MASTER TRUST
By: CSX TRADE RECEIVABLES CORPORATION
/s/ DAVID H. BAGGS
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David H. Baggs
President, Treasurer
(Principal Executive Officer)
Date: March 28, 2002
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signatures Title
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David H. Baggs* President, Treasurer, and Director
(Principal Executive Officer)
David A. Boor* Chairman of the Board, and Director
Allen C. Goolsby, III* Director
Leslie A. Grandis* Director
*/s/ RACHEL E. GEIERSBACH
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Rachel E. Geiersbach, Attorney-in-Fact
March 28, 2002
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EXHIBIT INDEX
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Exhibit
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24.1 Powers of Attorney of Messrs. Baggs, Boor, Goolsby, and Grandis as
Directors and/or Officers of CSX Trade Receivables Corporation.
99.1 Annual Certificate of Servicer with respect to the CSXT Trade
Receivables Master Trust 6.00% Trade Receivables Participation
Certificates, Series 1998-1, prepared by CSXT pursuant to Section
3.06 of the Agreement.
99.2 Report of independent Certified Public Accountants with respect to
the CSXT Trade Receivables Master Trust 6.00% Trade Receivables
Participation Certificates, Series 1998-1, prepared by Ernst & Young
LLP pursuant to Section 3.07 of the Agreement.
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