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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
TO
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 2-54754
GENERAL AMERICAN TRANSPORTATION CORPORATION
Incorporated in the IRS Employer Identification Number
State of New York 36-2827991
500 West Monroe Street
Chicago, IL 60661-3676
(312) 621-6200
Securities Registered Pursuant to Section 12(b) of the Act:
None
Securities Registered Pursuant to Section 12(g) of the Act:
None
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
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Registrant had 1,000 shares of common stock outstanding (all owned by GATX
Corporation) as of March 15, 1999.
General American Transportation Corporation meets the conditions set forth
in General Instruction I(1)(a) and (b) of Form 10-K and, therefore, is filing
this form with the reduced disclosure format
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Item 3. Legal Proceedings
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General American Transportation Corporation ("GATC") and GATX Terminals
Corporation ("Terminals"), each subsidiaries of GATX Corporation, are two of
nine defendants in the matter of In re New Orleans Train Car Leakage Fire
Litigation (No. 87-16374, Civil District Court for the Parish of Orleans), a
class action lawsuit arising out of a September 1987 tank car fire in the City
of New Orleans. The fire was caused by a leak of butadiene from a railcar owned
by GATC. The fire resulted in no deaths or significant injuries, and only minor
property damage, but did result in the overnight evacuation of a number of
residents from the surrounding area. Immediately after the fire a number of
lawsuits (representing approximately 8,000 claims) were brought against a number
of defendants, including GATC and its wholly-owned subsidiary Terminals. The
suits were ultimately consolidated into a class action brought in the Civil
District Court in the Parish of Orleans (the "Trial Court"). A trial of the
claims of twenty of the plaintiffs resulted in a jury verdict in September 1997
which awarded the twenty plaintiffs approximately $1.9 million in compensatory
damages plus interest from the date of the accident. In addition, the jury
awarded punitive damages totaling $3.4 billion against five of the nine
defendants, including $190 million to Terminals. On October 31, 1997, the
Louisiana Supreme Court held that a judgment incorporating the amount of
punitive damages could not be entered until all liability issues relating to all
8,000 class members have been adjudicated.
On June 18, 1998, the Trial Court entered a judgment (a) finding each of the
defendants responsible for compensatory damages to the members of the plaintiff
class in the specified percentages in the jury verdict, including twenty percent
as to GATC and ten percent to Terminals, but without specifying the quantum of
damages; and (b) finding five of the defendants, including Terminals, liable for
punitive damages in favor of the plaintiff class. The Trial Court designated the
judgment to be final and appealable. On June 25, 1998, the defendants filed post
judgment motions seeking a new trial or alternatively seeking to overturn the
finding of punitive liability for lack of sufficient evidence. The motions were
taken under advisement.
The Trial Court has ordered the commencement of trials of the claims of other
members of the class. The trial to determine the damages, if any, suffered by
the second set of twenty claimants is scheduled to commence on May 24, 1999. Two
weeks after the conclusion of this trial, a random selection of an additional
group of plaintiffs will be made in order that the trial of their damage claims
may commence thereafter.
On February 24, 1999, the Louisiana Supreme Court (1) denied the writ seeking to
delay any additional trials, (2) granted the writ requiring entry of a judgment
on the Phase I compensatory damages, and (3) authorized the Trial Court to enter
judgment awarding a specific amount of punitive damages to the twenty Phase I
plaintiffs (without specifying the method of allocation of such damages) in
order that there could be immediate review of the judgment. In view of the
Supreme Court's ruling, the Trial Court determined that it could not decide
pending post-trial motions and that such motions would not be addressed until
after entry of a new judgment. Pursuant to the Supreme Court's ruling, on March
17, 1999 the Trial Court announced it would enter judgments awarding punitive
damages against each of the five punitive defendants, including judgments in the
amount of $23,611 against Terminals in favor of each of the twenty claimants
whose cases were tried in September 1997.
GATC and Terminals believe that the compensatory damages awarded to the first
twenty plaintiffs are excessive, and intend to pursue post-judgment review of
the awards, and if necessary, vigorous appeals of any final judgment. Terminals
also believes that the punitive liability judgment is unsupported by law and the
evidence and intends to pursue appeals of all aspects of the punitive damages
judgment if it survives post-judgment review.
Although approximately 8,000 claims have been made, GATC and Terminals believe
that the damages, if any, that are finally awarded to the remaining plaintiffs
will on average be substantially less that the damages awarded to the twenty
plaintiffs whose claims have been tried.
As previously reported, various lawsuits had been filed in the Superior Court
for the State of California against GATX Terminals Corporation and its
subsidiary Calnev Pipeline Company arising out of a May 1989
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explosion in San Bernardino, California. All of those lawsuits have been
settled, dismissed or otherwise resolved.
GATC and its subsidiaries are engaged in various matters of litigation including
but not limited to those matters described above, and have a number of
unresolved claims pending, including proceedings under governmental laws and
regulations related to environmental matters. While the amounts claimed are
substantial and the ultimate liability with respect to such litigation and
claims cannot be determined at this time, it is the opinion of management that
damages, if any, required to be paid by GATC and its subsidiaries in the
discharge of such liability are not likely to be material to GATC's consolidated
financial position or results of operations.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
GENERAL AMERICAN TRANSPORTATION CORPORATION
(Registrant)
/s/ Donald J. Schaffer
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Donald J. Schaffer
Vice President, Finance and
Chief Financial Officer
March 25, 1999
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