ST/B&M in receivership?

FatNoah wrote:

Among the other companies suing Springfield Terminal for non-payment of debt include CSX Transportation, Union Pacific Railroad, GATX Financial, Rail Management Corp., San Luis Central Railroad, American Railcar Leasing, and Schuylkill Rail Car

Given a couple of the names in the above list, this may not go away quietly. Especially with Guilford's recent agreement with NS.

I still have a feeling Guilford will somehow weasel their way out of this after years of wasted time in litigation etc, but the names mentioned did leave me with more hope than I've had in a while that things may change, even if it's in 2023.

Guilford's high powered lawyers will not be able to walk all over UP and CSX attorneys it seems.

I would think that NS is well aware of all these problems...I'm sure their legal department leaves no stone unturned with regards to future liabilities that may be incurred by them due to a business relationship with a "partner" like Guilford. Perhaps NS is just biding time and positioning itself to be able to step in and have it's own New Encland route when the Guilford house of cards comes tumbling down? NS certainly has deep pockets and I'm sure could pull the triigger on a situation like that if it needed/wanted to.....under the guise of protecting it's own interests.

The Maine Committee for Better Rail Service (or something similar) entered an STB reply to the Pan Am Southern filing. Part of the filing includes the neat tidbit that of the 13 railroads that PAR interchanges with, 9 have gone on record about PAR's poor service and/or sued PAR. Also included in the filing is the text of the Greenbriar complaint. Here is a link to the STB filing:

http://stb.dot.gov/filings/all.nsf/6084 ... 223536.PDF

IIRC, there are some very specific terms in the Pan Am Southern agreement about who gets control over the Joint Venture if there is a change of ownership or control on the part of Pam Am. Basically, NS gets to run the whole show as far East as Ayer at that point. I think NS has their bases covered.

moth wrote:IIRC, there are some very specific terms in the Pan Am Southern agreement about who gets control over the Joint Venture if there is a change of ownership or control on the part of Pam Am. Basically, NS gets to run the whole show as far East as Ayer at that point. I think NS has their bases covered.

So does this mean that for it's 47.5 million dollar investment, NS becomes the owner of that piece of railroad? Wouldn't that make NS liable for any and/or all unpaid bills that Pan Am-Springfield Terminal-whatever name(s) the properties are under have accrued?..... Pan Am gets the money, violates the contract, NS takes over, and Pan Am keeps the 47.5 million, without being held responsible for past unpaid debts?

There is certainly a lot of legal questions that would come up, but I think the change of control applies to the management of PAS. NS would get a majority of the management positions, instead of 50-50.

The Helm SDs are still out there - this must mean Helm is getting paid, even if other creditors aren't.

Dave

davidp wrote:The Helm SDs are still out there - this must mean Helm is getting paid, even if other creditors aren't.

Well, there are two possible answers to that:

1. It has been reported that Helm is leasing the units to PAR in exchange for PAR storing the units free of charge; in return, PAR gets to use 10 of the 15 units at no cost.

2. If it was a traditional lease deal and PAR stopped paying, that doesn't mean the units would immediately disappear. As we've seen on other railroads that have leased locomotives and freight cars, it can take quite a long time before the lessor is able to retrieve those items after the lessee has stopped paying.

A complaint has been filed against PAR, and already we're figuring out who's getting the good silverware.

If this complaint reaches the courts, it will be tied up in years of litigation, and nothing will change on the day to day operations of PAR.

-otto-

Exactly. And one more thing, anyone who thinks the P&W or Railtex is going to buy PAR or some court or state is going to give it to them can forget about that little fantasy.
First of all, they would not be buying Pan Am Railways, or Springfield Terminal. They would be buying the Boston and Maine Railroad. So, aaallll the issues that have been kept in the shadows for so long will come exploding to the surface, the lease of the B&M to the ST will be null and void, and anyone who ever worked for or had anything to do with the B&M before it was leased to the ST would come crawling out of the woodwork. It would be like the collapse of the Soviet Union in a legal sense, no company (except maybe, maybe NS) would want to touch it.

davidp wrote:The Helm SDs are still out there - this must mean Helm is getting paid, even if other creditors aren't.

Dave

As has been mentioned in the thread regarding the HLCX units, it is a NO COST lease. HLCX sent 15 units to PAR and so long as they keep at least 5 stored at all times, they are free to use 10 at no cost. There is a huge surplus of 6 axle lease power and HLCX is actually saving money with this deal as 15 units are being stored for free. Helm last i heard is Bankrupt anyhow, so they need all the help they can get.

So no, Helm is not getting paid but that is perfectly OK with them. No leasing company in their right mind would do any sort of lease deal for $$ with PAR. The finance industry is well informed. They know which companies cannot be trusted. Some roll the dice anyhow.

According to newsletter Atlantic Northeast Rails and Ports, on Sept. 10 ST responded that a receiver was not needed for the following reasons:
1. On Sept 23 the Car Hire Railroad Clearing House will start operating and Greenbrier will automatically be paid through them going forward.
2. ST is getting it's financial house in order by, if you read between the lines, getting entirely out of the airline bussiness and concentrating on it's "core bussiness" freight railroading.
3. The money from the joint venture with NS will help resolve this and similar cases.
4. The sale of Northpoint will provide additional capital (est $70 million)
5. ST offers to pay down the debt to Greenbrier.
6. Argued that ST wasn't attempting to get an interest free loan as Greenbrier contended, and was not guilty of fraud, and have offered Greenbrier the means to pay almost half the claims, but that Greenbrier has not responded and that ST is making the payments anyway (?)
7. Greenbrier has legal remedies available that do not require a receiver, and that is the ability to attach "$513,000 from ST's bank account", plus Greenbirer's own acknowledgement of the railroads' real estate holdings worth several millions of dollars that would satisfy them if they won the suit.
8. ST would suffer harm that would outweigh any benefit to Greenbrier if a receiver were appointed becasue it would jeopardize the NS joint venture.
9. ST is presently in "good faith" negotiations with Greenbrier and others, and that other debtors have been "paid in full".
So we'll see what we will see!

NV290 wrote:Helm last i heard is Bankrupt anyhow, so they need all the help they can get.

Can you tell me where you heard that? I couldn't find any references to HLCX or Helm Financial Corp.

-otto-

Otto Vondrak wrote:

NV290 wrote:Helm last i heard is Bankrupt anyhow, so they need all the help they can get.

Can you tell me where you heard that? I couldn't find any references to HLCX or Helm Financial Corp.

-otto-

My Road Foreman mentioned that. That is why i said "Last i heard". I have yet to see anything in print on it.

I believe Helm Leasing is a Division of Helm Financial. So maybe only the Lease side is in trouble?