Otto Vondrak wrote:
Wonder no more! The NYSW was dead west of Butler when Conrail came around in 1976, but they weren't bankrupt. For whatever reason, they weren't considered part of the recovery plan.
Actually, the NYS&W filed for bankruptcy in 1976 - I don't remember the month, but I think it was shortly after the April 1 creation of Conrail. The NYS&W had been majority owned by Irving Maidman who had plundered the company (a series of bargain basement real estate sales from the NYS&W to his other companies, then those companies resold at a huge profit - this was done to avoid payment on NYS&W income bonds) and ran it into the ground. The 1976 default was because of not paying property taxes.
The first plan was to simply abandon the entire railroad. This cause an uproar and the trustee moved to sell the railroad as a going concern. Several companies besides Delaware Otsego looked at it - one was the group that today owns the Arkansas & Missouri. DO leased the line in 1980 but didn't complete the purchase of the bankrupt company until 1982.