Do fallen flags still exist (on paper)???

In researching the Reading Co and Penn Central, I am told that they did not get dissolved as corporate entities, but instead divested into other businesses.

In the case of the Reading Co, the c-corporation actually sold CR their rr assests on 4/1/76 but continued to become a real estate firm, managing and selling most of their old rr property not used by CR. Same as with Penn Central.

Are these really the same rr companies (same board, shareholders, etc) or do the c-corporations just get bought by investors during the bankruptcy sale who try to salvage what little assets they can and just use the same corporation paper/name?

Often a company comes out of bankruptcy without a foreclosure sale - that's probably what happened here. Their loans were likely transferred to Conrail.

It was my understanding that most of the companies Conrail absorbed still existed in one form or another, just not as Railroad companies.

I always assumed they managed the sale of all the realestate and other non-railroad assets the railroads had at the time.

Everyone (most people) just assumed, like me, that they were completely absorbed into Conrail, but over the years I have learned that was not the case as I found references to some of them doing business after 1976.

Does anyone know the whole story here?

I also heard that from a shareholder perspective, the stock holders of the railroads got screwed and took the US Government and Conrail to court, and eventually, in the 80's, won an undisclosed settlement to cover their losses.

Since Conrail was Government funded when it started, and the railroads it absorbed were bankrupt, I don't think Conrail (US. Gov) took any of the loans, but it seems like a quite a big mess!

What happened to all the stockholders, all the banks, all the private parties that were owed money when this happened?

And what about when Conrail eventually went public, again? Did anyone who lost out get any stock as compensation? I didn't think so?

Erie Lackawanna ended on paper in 1988 or 89........

The Reading Co. still exists. It owns real estate. For example, the Manville movie theaters are owned by Reading. When these companies went through bankruptcy, there were still some assets that were not sold off. These constituted the core of the "new" old companies.

Many former companies still exist that you think are defunct. For example, the shipping company US Lines still exists, but it has a different name which escapes me at the moment.

There are a lot of reasons to keep these large companies alive as shells, most of them for tax and liability reasons.

Wikipedia has this to say about the Penn Central:

The Penn Central Transportation Company was merged into Conrail, but its holding company, the Penn Central Corporation, continued. Though it retained ownership of some rights of way and station properties connected with the railroads, it continued to liquidate these and eventually concentrated on the insurance business to the point that it changed its name to American Premier Underwriters, and is today controlled by Carl Lindner and his American Financial Group.

Despite leaving the railroad business many years ago, American Financial Group owns Grand Central Terminal in New York City. The New York Metropolitian Transportation Authority is the station's current lessee.

The history page on the PC Railroad Historical Society site agrees:

And what happened to the Penn Central Company? When Conrail was formed, the government bought PC's rail assets from the company, so the Penn Central Company (the former holding company for the PC railroad) still existed. PC entered into other non-railroad businesses, such as real estate and insurance. ... On March 25, 1994, Penn Central Corporation changed its name to American Premier Underwriters (APU). ... In addition to its insurance business, APU still owns Grand Central Terminal in New York City, which is currently under a 110-year lease to New York Metropolitan Transit Agency.

Tom_E_Reynolds wrote:It was my understanding that most of the companies Conrail absorbed still existed in one form or another, just not as Railroad companies.

I always assumed they managed the sale of all the realestate and other non-railroad assets the railroads had at the time.

Everyone (most people) just assumed, like me, that they were completely absorbed into Conrail, but over the years I have learned that was not the case as I found references to some of them doing business after 1976.

Also remember that there are holding companies - for instance the Burlington Northern and Santa Fe Corporation owns the BNSF Railway (until recently the Burlington Northern Santa Fe Railway - no and). Often this is done for financial purposes, or to keep the operations of the railroad separate from the financial backing.

Usually the railroad company itself does merge, but the holding company is often kept separate.

Also note that any references to "New York Central Lines, LLC" or "Pennsylvania Lines, LLC" are to the CSX and NS subsidiaries created for the Conrail breakup.

Erie Lackawanna lasted well after 1976 as has been stated. It disolved itself in 1992. If you had held on to your stock until the end, you made quite a handsome profit too.

Erie Lackawanna, Death of an American Railroad 1938-1992 by H. Roger Grant and printed by Stanford University Press outlines the history and outcome very well.

I have heard of a similar book about the Penn Central, but never seem to remember the name. I remember seeing new Penn Central Realty signs in the early to mid 1980's in northern Bergen County and at the old Maybrook Yard with a contact number for interested parties.

The Lehigh and Hudson River was owned by other RRs, so I am unsure of how that ended life.

Chris

Chris, one of the real estate signs is still up in Norwood at the Broadway crossing, now I need to check tonight what the real estate company name is. As you said, originally they were ,marketed by Pen Central but seem to have been assigned to a realtor.
I always thought it was crazy thing to sell these narrow strips off, especially with the probable need to double track the line again. But it's related to the topic, I assume a lot of this land did not convey with Conrail and was left to the real estate investment rump portion of Penn Central.

Rich,

You are correct. The narrow strips may not be worth much, but for Erie Lackawanna they had acres upon acres of property throughout the system that was never conveyed. EL had property on the waterfront in NJ, some in NYC, some in Harlem, and all across the system.

PC may have some crappy parcels in Norwood, but think about Maybrook Yard. Probably 50+ acres of contiguous land near an interstate, wonder how much Yellow Freight paid? Also other parcels along their NJ lines, all you need is a 50' x 100' lot and you can build a house in most areas. If the RR right of way was 100' wide, they could subdivide a 50' wide lot off at every grade crossing.

Seems like they were able to get rid of the crap though. i.e. Conrail ended up with the derelict Poughkipsee bridge, which would have been a financial drain to PC.

Chris

Hello all,

What an interesting thread..

It's interesting to see what the various Conrail predecessors evolved into after Conrail. For those who are interested, here is what became of the Penn Central.

http://www.emporis.com/en/cd/cm/?id=104949

It's amazing that the corporate shell of the Pennsylvania Railroad still survives to this day!

As for the Reading Company, I believe it survived until very recently. However, I read recently that a corporate reshuffling at the Reading Company may have led to a final divestiture of its assets and a cessation of corporate activities under its original corporate charter.

A google search under either Reading Company, Reading Entertainment, and Reading Cinemas revealed a company in California who's principal business appears to be overseas. The california adress is one I recognized as having been involved at one time with the Reading Company.

I guess I'll have to do a little more research into this one......

Well, that's all for now folks......

See ya all later......

The non-rail assets of Jersey Central went into Central Jersey Industries after April Fools Day, 1976. That company existed as an industrial park operator etc until the relatively recent past, maybe five years ago.

A lot of the joint railway companies were also folded into Conrail during the months after it was formed. Niagara Junction, Owosso River, Ironton, and many, many more. It wasn't unusual for 3-4-5 railways to own shares in a connecting line or bridge, so the corporate overhead didn't make sense when Conail owned all five units.

Lackawanna484 wrote:The non-rail assets of Jersey Central went into Central Jersey Industries after April Fools Day, 1976. That company existed as an industrial park operator etc until the relatively recent past, maybe five years ago.

That's been my understanding as well.

Just a quick comment on the "strips of land" pieces of property.

Many of them have had second and third lives as conduits for fiber optic cables, natural gas pipelines, and other entities. One of PennCentral's highly profitable subs was Buckeye Pipeline, which went on to continued success after PennCentral.

Southern Pacific's telephone and telegraph sub went on to become part of SPrint, with thousands of miles of lines buried alongside the railroad's roadbed.

In Wreck of the Penn-Central it says that they were even involved with Six Flags (presumably a PRR investment), does anyone know if Empois is involved with that still? I've always assumed that Aol-TimeWarner owned it now.