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As part of its plan, CP has proposed putting itself into a voting trust until the merger receives a green light from the STB. This would allow CP chief executive Hunter Harrison to move over to Norfolk Southern and begin to implement his turnaround plan without breaking the regulatory rule that one railway can’t take control of another before a deal closes.

As a first step, CP has asked the STB for a declaratory order as to whether such a structure is likely to receive regulatory approval.

It is this proposal that the U.S. Army takes issue with in its letter, posted on the STB website Thursday.

“We are troubled by the possibility that Mr. Harrison could become a senior executive at Norfolk Southern in advance of the (STB) ruling in favor of common control/merger between Canadian Pacific and Norfolk Southern,” the letter says.

“If Mr. Harrison is a senior executive at (Norfolk Southern) he may be placed in a position where he must make business decisions with potentially competing interests.”

The army argues that the STB should take national security into account, and requests that it “does not permit de facto common control to occur before legal common control is thoroughly analyzed and approved.”

The STB will accept public comments on CP’s voting trust plan until Friday, and CP will have until April 13 to respond.

“We look forward to providing a fulsome response at that time,” said CP spokesman Marty Cej.

Norfolk Southern has repeatedly rejected CP’s offer, which values the Virginia-based railway at about US$27 billion. Norfolk Southern shareholders will vote on a resolution asking their board to engage in good-faith discussions with CP at the company’s annual meeting on May 12.

Norfolk Southern said last month that it would be willing to sit down with CP, but only if it were “to meaningfully increase the consideration it is offering.” In the meantime, it is urging its shareholders to vote against the resolution.

kowram@nationalpost.com

Twitter.com/KristineOwram