The CSX Decision Regarding Beneficial Ownership And Group Formation

On June 11, 2008, Judge Lewis A. Kaplan of the U.S. District Court for the Southern District of New York ruled in CSX Corporation v. The Children's Investment Fund Management (UK) LLP that:

• a hedge fund that entered into cash-settled total return equity swaps ("TRSs") as the total return receiver, or "long party," should be deemed the "beneficial owner" of the underlying common stock under Rule 13d-3(b) of the Securities Exchange Act of 1934 (the "Exchange Act") because, on the facts of the case, the court determined that the fund used the TRSs as part of a plan or scheme to evade the reporting requirements of the Exchange Act to which it would have been subject had it bought the stock outright; and