Commitments and Contingencies

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES:

In connection with the Agreement and Plan of Merger (Merger Agreement) among Genesee & Wyoming, RailAmerica and Jaguar Acquisition Sub Inc., the Company's wholly-owned subsidiary (Merger Sub), five putative stockholder class action lawsuits have been filed in state courts located in Florida and Delaware. On July 26, 2012, John Langan v. RailAmerica Inc., et al. was filed in the Circuit Court of the Fourth Judicial Circuit for Duval County, Florida, Civil Division (Florida Circuit Court), against RailAmerica, the RailAmerica directors, Genesee & Wyoming and Merger Sub. The complaint alleges, among other things, that the RailAmerica directors breached their fiduciary duties in connection with their decision to sell RailAmerica to Genesee & Wyoming via an allegedly flawed process and failed to obtain the best financial and other terms. The complaint also alleges that RailAmerica, Genesee & Wyoming and Merger Sub aided and abetted those alleged breaches of duty. The complaint requests, among other relief, an order to enjoin consummation of the merger of Merger Sub with and into RailAmerica (the Merger or Acquisition), rescission of the Merger Agreement, and attorneys' fees. On July 31, 2012, Nicolas Sambuco v. RailAmerica Inc., et al. was filed in the same court, names the same defendants and alleges substantially similar claims. Also on July 31, 2012, plaintiffs in the Florida actions filed a motion to consolidate the two Florida actions, appoint plaintiffs Langan and Sambuco as lead plaintiffs and appoint lead counsel in the proposed consolidated action. Plaintiffs in the Florida actions also filed an emergency motion for expedited proceedings on August 7, 2012 and filed an amended complaint on August 8, 2012, which included allegations that the information statement filed by RailAmerica on August 3, 2012, omits material information about the proposed Merger. On August 17, 2012, the parties in the Florida actions submitted a stipulation for expedited proceedings, which the Florida Circuit Court ordered on August 20, 2012.

On August 27, 2012, solely to avoid the costs, risks and uncertainties inherent in litigation, and without admitting any liability or wrongdoing, the Company and the parties to the Florida actions entered into a Memorandum of Understanding setting forth an agreement in principle to settle all related claims. The settlement is subject to, among other things, a determination of the settlement amount, the execution of a stipulation of settlement and final approval by the Florida Circuit Court.

On August 2, 2012, Ford v. RailAmerica, Inc., et al. (Ford) was filed in the Court of Chancery of the State of Delaware (Delaware Chancery Court). The Ford complaint named the same defendants and alleged substantially similar claims as the Florida actions and sought an order to enjoin consummation of the Merger, attorney's fees and damages. On August 7, 2012, two more actions were filed in Delaware Chancery Court, KBC Asset Management N.V. v. RailAmerica, Inc. et al. (KBC) and Pesochinsky v. RailAmerica, Inc., et al. (Pesochinsky). Both of these actions named the same defendants and alleged substantially similar claims as the Florida actions and requested an order to enjoin consummation of the Merger and attorney's fees. On August 13, 2012, plaintiff in Ford filed an amended complaint. In addition to the allegations asserted in the initial Ford complaint, the amended Ford complaint alleged that the information statement filed by RailAmerica on August 3, 2012 omitted material information about the proposed Merger.

On November 1, 2012, the parties in Ford submitted a stipulation and proposed order of dismissal agreeing to dismissal without prejudice of all claims pending in the action. Also on November 1, 2012, plaintiff in Pesochinsky submitted a notice and proposed order of dismissal agreeing to dismiss the action without prejudice. On November 6, 2012, the parties in KBC submitted a stipulation and proposed order of dismissal agreeing to dismissal of all claims pending in the action. The Delaware Chancery Court has granted all three orders of dismissal for the Delaware actions.

In addition to the lawsuits set forth above, from time to time, the Company is a defendant in certain lawsuits resulting from its operations in the ordinary course. Management believes there are adequate provisions in the financial statements for any probable liabilities that may result from disposition of the pending lawsuits. Based upon currently available information, the Company does not believe it is reasonably possible that any such lawsuit or related lawsuits would be material to the Company's results of operations or have a material adverse effect on the Company's financial position or liquidity.