The railroad car maker controlled by Carl Icahn has reached a settlement of legal action with federal rail safety regulators over the production of tank cars.
Icahn, the man who tried to take over Phillips Petroleum in 1985 two years before the company left Bartlesville and moved to Houston controls American Railcar Industries Inc. The company came under government scrutiny when investigators with the Federal Railroad Administration discovered a tank car leaking ethanol in 2014.
The settlement requires the company to carry out most of the leak testing that had been ordered by the Federal Railroad Administration. The government had issued a “railworthiness directive” last year, one fought by the rail car maker.
The inspections will have to be completed by the end of 2017. ARI had protested last year, claiming the FRA had gone beyond its authority to force such inspections. It filed suit in the U.S. Court of Appeals for the District of Columbia Circuit where the case was dismissed on Friday after the government and the company said a settlement agreement had been reached.