Hello Trainlaywer,
I saw your post a while ago, and I gathered you were likely expecting a response from me. Not to let you, and the others here at RR.net, down, I did send off a request to Mr. Strohmeyer seeking comment on your report.
There was a very limited, extremely cautious, response coming from Somerset. I was aware already of the proposed settlement talks before you posted your update. I received my early updates from my friends at the M&E and later from Mr. Strohmeyer himself.
What I can tell you is this:
To paraphase Mr. Strohmeyer's comments on your post:
When asked if he read your comments and what he thought about your knowledge on the subject, he stated "It is not what Mr. Edwards knows about the settlement that concerns me, but rather, what he doesn't know that is more important to me."
He has confirmed that your explanation of things is, for the most part, consistent with the settlement agreement, albeit with your usual slant to it. He has no doubt that you probably have read the proposed agreement.
He did confirm that Somerset is not party to the settlement. He also stated that Somerset, at the request of gentleman by the name of Bill Gait, withdrew their councel from the case after BRI had the matter transferred to the Bankruptcy Court. He mentioned that unless BRI asks them to return to court, Somerset will stay away from the proceeding.
He pointed out that you are correct in that without litigating the matter further, Standard's claims would be viewed by the court as a valid. He continued by saying that both sides will now have to live by the terms of a document he called the "hand written" agreement. As such, Standard, a gentleman by the name of Joe Horner, and a gentleman whom he called "Michael", no longer have any claims against the company.
He once again reminded me that Somerset never did, and still to this day does not, consider their claims valid.
He mentioned that since the release of those alleged claims constitutes the only consideration ever paid for the assets that were ultimately transferred to Standard, he mentioned that Standard would find it imprudent to attempt to go back on the deal either, since doing would create a "complete absence" of consideration. Without at least some consideration, a contract would not be deemed valid in any court.
If you will allow me to speculate, (and it is speculation on my part), I got the distinct impression that whatever the agreement between Standard and Somerset was or was not, Somerset is, by doing what their doing, clearly turning that document into a "legal" anvil. Where the hammer will come from is another point of speculation!
I was told were the CNJ cars are going to. I was asked specifically not to reveal that location, since it may reveal upcoming CNJ Rail intentions. However, since you have been kind in your comments towards myself, and since you have a genuine interest in the BRI matter, I'll tell you this with absolute certainty - they are not headed to BRI!
I was surprised to see that he used Somerset's corporate shell to buy the cars in Boonton, considering that they clearly appear to be giving every indication that Somerset is walking away from BRI. He started to me that while Somerset may be walking away from BRI, it must do so in a very specific manner. I'll digress here for a moment.
He stated both BRI and CNJ Rail have a vested interest in making sure the Somerset shell continues on, at least for a little while. He stated that BRI is Somerset's single largest creditor. As such both sides want to make sure Somerset will live on to "fight another day". What he left out was "why".
He did agree with you Trainlawyer that that both the M&E's and Standard's exemptions would indeed be rendered moot. He went on to say that upon completion of the final order and its signature by the Judge, BRI will petition the STB to revoke both exemptions.
What I found interesting was how they're handling the original Somerset filing. Somerset is apparently, going to file a motion to withdraw their own filing. He indicated that there is some concern from both Somerset, and BRI, on how the STB may handle that filing.
The problem stems from the fact that there never was a challange to the original Somerset STB filing. Since it has been in place now for nearly 5 years, how will the STB want it handled? Will they allow it to be withdrawn? Will they want it revoked?, or will they want the line "abandoned", in which case, it will be pure mayhem all over again.
Also, there apparently is the "Horner" factor. If Joe Horner wanted to create a railroad on his property, and he indeed created one, than this matter is not as cut and dry as Trainlawyer would lead us all to believe.
Somerset is apparently working closely with BRI to resolve these issues and others. The line that I thought most interesting, and I'm sure you will too Trainlawyer, was "We need to resolve Somerset's filing before the new filings hit the STB." When asked to clarify that remark, Mr Strohmeyer ignored the question and changed the subject.
I would like to ask you a few questions Trainlawyer.
1. If Somerset is no longer involved at BRI, how come they know so much about a settlement they are supposedly not party to?
2. If Somerset is no longer involved at BRI, how come they know intricate details about current BRI matters that they otherwise wouldn't need to know, if they were indeed not involved at BRI?
3. Somerset appears to be thrilled with the way things are headed at BRI. Can you speculate as to why, since you have indicated on more than one occassion that they are no longer down there?
4. At this point in the discussions, is the process beyond the point where discovery is permitted?
5. If BRI is now Somerset's largest unsecured creditor, why would they want to cut them off now, without including them in the "goodbye" settlement?
6. How difficult would it be to have a default judgement overturned (like Somerset will have against), versus a settlement decree (like Standard will have) if somebody really wanted to?
7. Assuming Somerset is indeed not party the settlement, what would they get, or maybe not get, out of the deal that would make it worth their while to take the position they appear to be taking?
8. Is the settlement a good deal for Standard?
9. Is it wise to enter into a settlement agreement without knowing just exactly what Somerset is up to?
It appears to me that either Somerset, or one of its affiliates, clearly has some interest still in the property. What that interest or level of interest is, is anybody's guess.
Anyone care to speculate?
I'm going to go out on a limb here and speculate that this isn't going to end this month. Well, that's all for now folks,
See ya all later.
PS: Trainlawyer, I'm still don't want to get involved in the battle between Standard and Somerset. I'm just reporting what Mr. Strohmeyer told me. I don't want to get involved in this dispute. I'm not taking a position either for or against, so please don't take my head off.!