• What's next for MMA?

  • Discussion of present-day CM&Q operations, as well as discussion of predecessors Montreal, Maine & Atlantic Railway (MMA) and Bangor & Aroostook Railroad (BAR).
Discussion of present-day CM&Q operations, as well as discussion of predecessors Montreal, Maine & Atlantic Railway (MMA) and Bangor & Aroostook Railroad (BAR).

Moderator: MEC407

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  by CN9634
 
Irving wants access to another port. They have sought out deals with both MMA and PAR (Separately not together) about acquiring lines but nothing has materialized yet. Wait for the fire sale.
  by gokeefe
 
CN9634 wrote:Irving wants access to another port. They have sought out deals with both MMA and PAR (Separately not together) about acquiring lines but nothing has materialized yet. Wait for the fire sale.
If I were Irving I would be in the process of preparing to make an all cash offer once the bankruptcy is filed.
  by fogg1703
 
Wonder if there is any advantage for anyone to make an offer now as opposed to waiting for an anticipated bankruptcy?
  by BandA
 
I still don't understand; If the part of MMA in Canada is incorporated in Canada as a seperate entity, why would the US subsidiary have any liability (probably the engine that caught fire is owned by the US arm, so that might be a lever). I see liability but not criminal negligence.
  by Gilbert B Norman
 
Mr. B and A, I'm not a lawyer nor do I play one on TV - and they don't have too many TV series about my profession - CPA.

However, I would think that the 'corporate shield' in place only to conform with a bilateral treaty between the US and Canada, between MM&A and MM&A Canada, will be easy to pierce; same with any domestic properties of Rail World (San Luis Central?).

I think RW's overseas properties are safe.

Just an observer 'doin' the talkin'
  by MEC407
 
I posted this in the Lac-Mégantic thread, but it bears repeating here, since it's such an insightful look into MMA's past, present, and future:
MEC407 wrote:The Maine Sunday Telegram (the Sunday edition of The Portland Press Herald) has a rather long, rather detailed article about Mr. Burkhardt and the way he's been handling this disaster:
Maine Sunday Telegram wrote:As a boy growing up in Queens, a borough of New York City, Ed Burkhardt would sneak onto the trains in the nearby rail yards and ask engineers for rides in the cab. In high school, he worked one summer driving spikes with a sledgehammer with a track gang with the Great Northern Railroad in Washington state.
. . .
One magazine called him "Railroader of the Year" and another "one of the 16 Railroaders of the Century."
. . .
Recently, another Burkhardt success story was in the works in Maine. A struggling little railroad that he had been trying to revive for the past decade had finally begun making money thanks to its new cargo: crude oil.
. . .
Now age 75, Burkhardt is fighting to save a railroad that stands on the edge of financial ruin and at the center of a criminal investigation.
. . .
In an interview with the Maine Sunday Telegram late Friday, Burkhardt defended his management of the railroad, the Montreal, Maine & Atlantic Railway, and controversial cost-cutting measures, saying safety has always been his top priority. But he also for the first time admitted to mistakes in his public handling of the disaster.


Read more at: http://www.pressherald.com/news/my-miss ... 07-28.html" onclick="window.open(this.href);return false;
The article is not short but it's very much worth reading. Please take a look.
  by chrisf
 
fogg1703 wrote:Wonder if there is any advantage for anyone to make an offer now as opposed to waiting for an anticipated bankruptcy?
Nobody's going to buy with that much liability pending.
  by Gilbert B Norman
 
Mr. Maine Central, I will readily admit that I am a 'news snob'.

I have been reading The New York Times for over sixty years and The Wall Street Journal for over fifty. These are the standards of journalism to which I have become accustomed and I guess could say 'expect'.

I sincerely believe that investigative article you linked appearing in your 'mid-market' Portland newspaper is on a par with the investigative reporting found in The Times. Somehow, I think it is a case of read and learn from that reporter's work, as I think he will eventually be on his way to a 'top 25' market.

There is a maxim within the media industry, 'the only way up is out'.
  by F-line to Dudley via Park
 
chrisf wrote:
fogg1703 wrote:Wonder if there is any advantage for anyone to make an offer now as opposed to waiting for an anticipated bankruptcy?
Nobody's going to buy with that much liability pending.
Bankruptcy courts have a way of managing that. If the bottom line is that MMA does not have enough cash...and cannot raise enough cash through asset sales to pay for disaster liability...there's not a lot that can be done. The gov't has to broker the dispersal of assets to raise money for the liability, some regular-business creditors are just gonna have to eat it, and the gov't is just gonna have to eat it. I'm not sure how Canadian bankruptcy courts work--and especially how Canadian and American bankruptcy courts collaborate across international borders in a case where the proceeds need to pay for the disaster--but given the civilian loss of life the town is Creditor #1 under dire emergency conditions. This could expedite the asset sale much faster than it normally would, and get additional gov't parties (U.S. State Dept.?) involved pulling strings. I'm not sure what the precedents are. You'd probably have to look at a large industrial plant disaster that took down a multi-national and assets in multiple countries for any sort of applicable precedent. This isn't exactly a common occurrence, but probably not unprecedented.
  by Ridgefielder
 
Gilbert B Norman wrote:Mr. B and A, I'm not a lawyer nor do I play one on TV - and they don't have too many TV series about my profession - CPA.

However, I would think that the 'corporate shield' in place only to conform with a bilateral treaty between the US and Canada, between MM&A and MM&A Canada, will be easy to pierce; same with any domestic properties of Rail World (San Luis Central?).

I think RW's overseas properties are safe.

Just an observer 'doin' the talkin'
The (what you rightly note as excellent) Portland Press-Herald article linked to above identifies Rail World as one of 20 anonymous shareholders in the MM&A. This leads me to believe that, in fact, the rest of Rail World's properties, both US and elsewhere, are going to be remote from any bankruptcy, or any legal liability stemming from the wreck. The idea that creditors can't go after the assets of individual shareholders of a company is a fundamental principal of the limited liability corporation, after all.

I think the bigger danger to Rail World is reputational risk. Burkhardt's been a skilled direct investor in the rail industry for 30+ years: but after this, who is going to want to risk a PR nightmare by selling him a line? I see this as a real problem, particularly when you're talking about privatized state rail systems overseas, where he is already coming in at a disadvantage as a foreign interloper.
  by gpp111
 
As the overhead freight MM&A carries is rerouted to other lines, there is the potential that the shippers might be slow to return to the MM&A (assuming it survives and the line is eventually restored). If we pretended the wreck did not involve either oil, a town, or any deaths and injuries, but was just a big mess that required a very long time to clean up and for service to be restored, this reduction of revenue would be crippling.

I think bankruptcy is inevitable, the question now is whether there will be criminal prosecution of individuals.
  by Ridgefielder
 
gpp111 wrote:I think bankruptcy is inevitable, the question now is whether there will be criminal prosecution of individuals.
And that is a question to which we will not know the answer until the Canadian government has concluded their investigation of the wreck and the events surrounding it, which I'm guessing is going to take at least 4 - 5 months.

I'd also hesitate to say bankruptcy is inevitable. I think it depends on how quickly the Sûreté de Quebec concludes their "on-the-ground" investigation in Lac-Mégantic and allows the line to reopen. Remember, no matter how much the company might wind up owing in damages, it's going to be many years before they have to cut a check-- legal proceedings take time. The immediate threat to the road's finances is the loss of traffic due to the line closure.
  by KEN PATRICK
 
the mayor is on record stating that the railroad must have a new route away from his town . can't return to the present trackage. also the railroad wasn't paying the spill cleanup people that they hired. after threatening to leave the job, the town agreed to pay the cleanup folk-estimated at $4mil. evidence of cash flow problems. there have been filings in illinois going against the parent company. the 20 shareholders are exposed since llc doesn't shield where crimninal acts are in play. what confuses me is why burkholder remained involved in mma management. he is not a shareholder. is it ego? anyone can cut costs in railroading in the short run. what takes genius is to create the proper cost-volume-pricing environment that satisfies long term health objectives. clearly not the case with mm&a. you can't make this stuff up. ken patrick
  by MEC407
 
From The Portland Press Herald:
The Portland Press Herald wrote:MDOT plans for possibility of rail shutdown

Rail officials are preparing contingencies in the event Montreal, Maine & Atlantic Railway stops service following a disaster that claimed 47 lives in Lac-Megantic, Quebec, about 10 miles north of the Maine border.

Nathan Moulton, rail director for the Maine Department of Transportation, said he's making no predictions about the rail company's future but that he'd be remiss if he didn't have a contingency plan in the event it ceases operations.

Moulton said staff attorneys have looked into how service would continue either through a bankruptcy court trustee or through an alternative service directed by the Surface Transportation Board.
Read more at: http://www.pressherald.com/news/maine-M ... ilway.html" onclick="window.open(this.href);return false;
  by gokeefe
 
Anything involving the STB is a "no kidding" solution. Good to see MDOT proactively protecting Maine interests.
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