Has IP gone "Belly up"?

As of a couple weeks ago Mount Hood's two locomotives and what looks to be all of the passenger equipment are still on site. Their main (only?) freight customer, the mill that transloads in Odell, has added a second shift and there seems to be no shortage of lumber loads going out

Backshophoss wrote: ↑Thu May 07, 2020 3:13 pm This could effect the MBTA's Cape Flyer service,along with other active passenger ops.
Figure on a long delayed ruling till the virus winds down.

Why would it effect the Flyer? Mass Coastal is still operating, Keolis provides the crews, and MassDOT owns the trackage.

Court can order NO passenger operations while the bankruptcy proceeds in court.
conserving cash and estate value, also expenses including insurance need court approval

Believe MassDOT and MBTA are following the case

Of course MassDOT is following the case so they can put out a request for bids to keep the line running.

Backshophoss wrote: ↑Sat May 09, 2020 7:24 pm Court can order NO passenger operations while the bankruptcy proceeds in court.
conserving cash and estate value, also expenses including insurance need court approval

Believe MassDOT and MBTA are following the case

Just to clarify, you're suggesting that an Illinois bankruptcy court can order MassDOT not to run a public service on their own trackage, with their own equipment and crews, because their contract freight operator/tenant is owned by a company that is bankruptcy proceedings?

Yeah, no. If MassDOT owns the trackage, they can name a replacement operator on their property. But they're also responsible for providing insurance for that operator.

Website down; no listed phone. Offices in the Burlington Building? Who knows.

Ellis and Gregory both from well to do families. Who knows what is left for other siblings.

As reported in the business press, several subsidiary roads have been forced into Involuntary Bankruptcy. No word if the parent IPH has filed.

Good riddance; I've had no use for them ever since '76 when Ellis started an outfit named Golden Arrow Tours - and he stung good friends when he CXD an excursion.

Further, I was "one click away" from booking a "fly down, Pullman Rail back" joyride. I had on one IE tab PRJ, another United Airlines; transportation on both one click away. Went to the PRJ tab, and in a five minute interval, he had scrubbed.

That would have ended up an "airfan joyride".

Article about equipment going up for sale:
http://railfan.com/former-iowa-pacific- ... -for-sale/

I've heard rumors that Iowa Pacific was a Ponzi scheme, which could possibly be true based on how their financial collapse played out. (Unless they are stopped by law enforcement, many business that are Ponzi schemes appear to be financially healthy for many years, but then, from out of nowhere, suddenly and quickly collapse financially due to them suddenly owing their investors (creditors) money when those investors try to withdrawal investments that the company can no longer pay back due to not having new investors to pay those returns). How Iowa Pacific's financial collapse played out is a sign of an unravelling Ponzi scheme, as it included all of the above criteria.

I believe this to be the first formal reporting of what all here knew to be the case:

https://businessbankruptcies.com/cases/ ... ldings-llc

The Petition was filed March 22, 2021

Note the Bankruptcy petition requests Chapter 7, which means no expectation of a Reorganization. That would be a Chapter 11. Just liquidate the assets and let the creditors divvy up the proceeds.

My guess is that Iowa Pacific was run by a group of railfans who got themselves in over their heads. Big dreams need BIG money. The only "railfan" I know of who could pull that off is a guy named Warren. Rooting around in his sofa cushions one night he came up with 70 Billion dollars to buy himself a model railroad 12 inches to the foot. I'm sure you've heard of it, it's called the BNSF. Unless you have that kind of money you need to stick to model trains.

As for whether or not this was a Ponzi scheme I'm sure the feds would be all over it if it was. There are LOTS of Ponzi schemes out there but since this isn't a financial blog/site I'll leave it at that. I will say that if you sniff the air you might smell the scent of "musk". That one worked well but now the big boys are closing in.

Regarding "LOTS" of Ponzi schemes, I'll just leave this link here for further reading ...

https://wolfstreet.com/2021/12/26/the-p ... th-ponzis/

Ed had an idea and it worked as long as he had cash flow.

The fire on the SLRG killed off a chunk of that cash flow and Amtrak did the rest with the shenanigans around the Hoosier State. The final nail was Amtrak all but killing off PV movements. Covid would have been the death knell.

Yeah, there was mismanagement. He over spent on amassing their collection.

What's undeniable is that a lot of classic equipment was refurbished and/or saved in his experiment. Where that goes in a day where Amtrak has essentially killed off charters is unknown, but at least most of it is certified and able to be moved on its own wheels to new owners and homes.

I'm particularly grateful that a fully functional CNW E8 is now back in Illinois. It's legal to leave the IRM, which is a huge advantage for off museum charters where they might not want to take the aging and priceless E5.

Sent from my SM-G981U using Tapatalk

RRspatch wrote: ↑Tue Dec 28, 2021 2:37 am My guess is that Iowa Pacific was run by a group of railfans who got themselves in over their heads.

Since "I knew a few of 'em" along the way, I'd dare say fair assessment.

Throw in several from wealthy families, and you have the formula for failure. Ellis was a more accomplished musician (guitar, folk music) than businessman.

All I know is that they "stung" good friends of mine with a '76 "Golden Arrow" fan trip; and they darned near "stung" me when, as I earlier described in this topic, I was "one click away" from booking, and paying, for a Pullman Rail Journey.

Finally, I think the "wakeup call" with this outfit should have been the PRJ "almost" when X-ing the NS (Wabash) at Tolono, IL. Fortunately, a railfan Attendant "didn't like the feel of something" and pulled the cord before it was too late.

The cars remained upright, no injuries.

Pure and simple, Iowa pacific was a dream child of Ed Ellis who honestly and sincerely believed that historic equipment, completely refurbished, staffed with dedicated ala Pullman employee crews could operate passenger lines with a subsidy for substantially less than what Amtrak could. So it was a basically a two pronged sword: Goina make a fortune running world class classic trains and going to bury Amtrak state subsidy lines in the process. So that was the mission statement. In pursuing this dream, they acquired by lease and or sale a variety of shortlines here and there some with substantial freight revenue and some virtually none..
They struck it rich in the Permian Basin lines with fracking sand etc. The Arizona Eastern also was a clear winner with freight. These basic freight line ops were purchased in Eds eyes to help subsidize the passenger fantasy.
They got a large FRA loan to underwrite the rehab of Arizona lines trackage. When things got a little pinched, they sold the Arizona Eastern for a large multiple of their original purchase price and then just when they had a certain amount of new found liquidity they made a huge mistake.
They took their pot of gold and ran around the country picking up historic passenger engines and cars. When the FRA came a calling for their loan payback, which was predicated on being repaid in full if and when a railroad was sold by the borrower, their liquidity was toast.
And that was the pivotal moment where a million robbing peter to pay paul scams became the order of the day, because they had to repay the FRA immediately. And then, all of a sudden, everybody from Santa Claus to the reservation clerks to the fuel providers found themselves with coal in their stockings and little or no cash in their pockets.
IP danced a number of dances but the bottom line was that they owed way too much after the FRA loan was repaid. All the well thought out passenger operations, had not been making very much money with the exception of the occasional Polar Express moments. The equipment that they had squandered their cash on was basically junk that needed millions to come up to the IP standard.
For the last few years, the steady bleeding and selling of this and that while continuing to take advantage of the elves and the various vendors around the planet in order to keep the dream alive partially sustained them until their major creditors insisted on being repaid.
There being a shortage of fools in the wings wanting to further loan and or give money in order to preserve the Ed Ellis vision and save the mother ship, the IP circus had no choice but to finally take down their tents. In the process, they had burned an awful lot of folks.

This is were the Railroad Press of Trains,Railway Age and Progressive Railroading has failed us...Not a peep or much in the way of reporting about one of the largest railroad bankruptcies since Penn Central and Rock Island. I am disapointed