What happened to the New Haven post 1968?

There have been other threads on this forum on what happened to the railroad companies after the advent of Conrail (i.e. the Reading invested in Australian movie theaters, Penn Central is now American Financial Group, and Erie Lackawanna dissolved). Penn Central was ordered to take over all New Haven Railroad operations after 1968, not the company. What happened to the New York, New Haven, & Hartford Railroad Company after 1968?

(edited to add signature)

C.J.V.

Did Penn Central not take all assets of New Haven railroad ?

I too was under the impression that Penn Central acquired the New Haven as a corporation, not just the physical assets.

I was under the impression that Penn Central didn’t because one of my NHRHTA Shoreliners (Vol. 31, Issue 4) states that “the shell corporation of the railroad still existed [as of 1969] following the Penn Central takeover, as American Financial Enterprises.” Also, I believe the trustees fought for compensation for the New Haven after the takeover. I guess what I'm really asking is what did American Financial Enterprises inherit from the New Haven and what happened to it?

(edited in light of new information)

C.J.V.

A curious thing about corporations is that once they cease operations and normal function, they usually don't quite cease to be. In fact I recall seeing a reference somewhere to an NYNH&H annual report from 1972, it may have been titled "the estate of".

You can find some information in the NYC tax map. As an example, block 2260, lot 62 in the Bronx is the Harlem River terminal site. There are two documents dated to 12/31/1968 concerning this lot and a number of others in the Bronx: a deed from the NYNH&H trustees (Richard J Smith et al) to the Penn Central Company, and a Fidelity Bank mortgage with some interesting language (excerpted):

Whereas...the Company has purchased from the New Haven trustees...the railroad properties described in the several deeds and bills of sale dated December 31, 1968 delivered to the company by the New Haven Trustees; and pursuant to the New Haven Agreement the Company is obligated to issue to the New Haven Trustees...bonds secured by a first mortgage lien on the real property so acquired...Whereas the Company, in order to carry out the terms of the New Haven Agreement, desires to issue to the New Haven Trustees 5% Divisional First Mortgage Bonds due January 1, 1994...

There are some references in the deed to a "plan of reorganization for the New Haven" and an "agreement...providing for the transfer and sale of the New Haven's assets...to Penn Central." It reads like the plan was to convey to PC the railroad assets and some other things, such as shares in the the Providence and Worcester Railroad Company and the mortgages, bonds, certificates, and shares of the Boston and Providence Railroad Corporation (!), among various other non-railroad-operation assets. In return, PC would assume operation of all New Haven operations, and the trustees would receive 950,000 shares of PC stock, $33.6 million of PC bonds (the aforementioned ones), and $8 million cash. I guess that that would be considered sufficient compensation for the trustees to make good on debts held by the NYNH&H.

Most of the entirely New Haven assets seem to be covered under those documents. I wonder what happened to those bonds?

Here is something that maybe unique to the rail industry

Definition of DIVISIONAL (OR DIVISION) BOND
A railway issue secured by a mortgage upon a division and not upon the entire property, but, as a rule, the direct obligation of the railway company itself. A divisional bond, however, may cover a property afterwards taken into a consolidation. In that sense the term is merely used to distinguish such a bond issue from one upon the consolidated property, and would not, in that case, probably bear the promise to pay of the latter. A divisional bond may bear the guaranty of the parent company, but an investor should not allow himself to feel secure merely on that alone, but should always consider the actual value of the property mortgaged; in other words, should judge the divisional bond purely upon its own merits, irrespective of the guaranty. Should the division not prove valuable to the main line, the guaranty might turn out to be worthless when demand for payment should be made of the parent company as has frequently proved to be the case.

Kilgore Trout wrote:A curious thing about corporations is that once they cease operations and normal function, they usually don't quite cease to be. In fact I recall seeing a reference somewhere to an NYNH&H annual report from 1972, it may have been titled "the estate of".

You can find some information in the NYC tax map. As an example, block 2260, lot 62 in the Bronx is the Harlem River terminal site. There are two documents dated to 12/31/1968 concerning this lot and a number of others in the Bronx: a deed from the NYNH&H trustees (Richard J Smith et al) to the Penn Central Company, and a Fidelity Bank mortgage with some interesting language (excerpted):

Whereas...the Company has purchased from the New Haven trustees...the railroad properties described in the several deeds and bills of sale dated December 31, 1968 delivered to the company by the New Haven Trustees; and pursuant to the New Haven Agreement the Company is obligated to issue to the New Haven Trustees...bonds secured by a first mortgage lien on the real property so acquired...Whereas the Company, in order to carry out the terms of the New Haven Agreement, desires to issue to the New Haven Trustees 5% Divisional First Mortgage Bonds due January 1, 1994...

There are some references in the deed to a "plan of reorganization for the New Haven" and an "agreement...providing for the transfer and sale of the New Haven's assets...to Penn Central." It reads like the plan was to convey to PC the railroad assets and some other things, such as shares in the the Providence and Worcester Railroad Company and the mortgages, bonds, certificates, and shares of the Boston and Providence Railroad Corporation (!), among various other non-railroad-operation assets. In return, PC would assume operation of all New Haven operations, and the trustees would receive 950,000 shares of PC stock, $33.6 million of PC bonds (the aforementioned ones), and $8 million cash. I guess that that would be considered sufficient compensation for the trustees to make good on debts held by the NYNH&H.

Most of the entirely New Haven assets seem to be covered under those documents. I wonder what happened to those bonds?

Was the New Haven a Delaware corporation or was it registered in Connecticut?

If nobody went to the trouble of dissolving it, it may still exist in some form. IIRC, the WW&F museum up in Maine legally *is* the Wiscasset, Waterville & Farmington Railway Co.-- when they went up to Augusta to register the name they discovered the corporate entity was still intact and bought the thing.

Wikipedia says this, but gives no citation.

On August 28, 1980, American Financial Enterprises, Inc., acquired the assets of the New York, New Haven and Hartford Railroad Company when the plan for reorganization was approved by the court and the company was reorganized. This brought to an end the 108-year corporate history of the storied railroad, and the end to the 19-year saga of its second bankruptcy reorganization. American Financial Enterprises would become the largest single stockholder of Penn Central Company shares by the mid-1990s, controlling 32% of the stock of the company.

Maybe as of 1980 the railroad existed entirely on paper (its assets having been conveyed several times since then) and perhaps was allowed to dissolve on the basis of having no assets. I have no idea how to research something like that, I just happened to stumble across that deed.

Though that poses an interesting question - does CDOT actually own the McGinnis scheme? Or do they (and model makers) use it while hoping nobody cares enough to sue? Was it ever trademarked?

Kilgore Trout wrote:Wikipedia says this, but gives no citation.

On August 28, 1980, American Financial Enterprises, Inc., acquired the assets of the New York, New Haven and Hartford Railroad Company when the plan for reorganization was approved by the court and the company was reorganized. This brought to an end the 108-year corporate history of the storied railroad, and the end to the 19-year saga of its second bankruptcy reorganization. American Financial Enterprises would become the largest single stockholder of Penn Central Company shares by the mid-1990s, controlling 32% of the stock of the company.

Maybe as of 1980 the railroad existed entirely on paper (its assets having been conveyed several times since then) and perhaps was allowed to dissolve on the basis of having no assets. I have no idea how to research something like that, I just happened to stumble across that deed.

Though that poses an interesting question - does CDOT actually own the McGinnis scheme? Or do they (and model makers) use it while hoping nobody cares enough to sue? Was it ever trademarked?

I'm pretty sure that trademark protection lapses after a period of time if the owners do not go to the trouble of maintaining it. Thought I remembered reading this around the time UP rolled out their first "heritage scheme" diesels in MoPac, MKT, etc. colors: part of the rationale behind UP's doing this was to retain trademark protection on the logos/etc. Anyway my guess would be that the rights to the NH logo and paint scheme(s) were conveyed to PC and thence to Conrail as part of the "railroad" assets.

The NHRHTA claims to have the rights to use and regulate use of all NHRR logos. They don't mention paint schemes though.
C.J.V.

DutchRailnut wrote:Did Penn Central not take all assets of New Haven railroad ?

I have annual reports from the trustee of the estate of the New York, New Haven & Hartford Railroad Company dated 1972. In short, the activities of the trustee were related to the Penn Central bankruptcy and reorganization post-1970. Quote, "While the main objective of the New Haven Trustee, namely full payment of the balance due the New Haven Estate for property sold to Penn Central, remains to be realized through the Court and the [Interstate Commerce] Commission proceedings in which were are now participating, the Estate today is in a much stronger position than it was a year ago..." In other words, the ghost of the New Haven continued to battle in the courts for years after 1969 to get what it was due from the Penn Central Corp.

The New Haven filed Chapter 77 bankruptcy on July 7, 1961, and the trustees for reorganization assumed office on August 31, 1961. All of the assets of the New Haven were transferred on December 31, 1968, to the Penn Central in exchange for capital stock, bonds, cash, "and the assumption of various obligations and liabilities of the New Haven."

On June 21, 1970, Penn Central filed for Chapter 77 bankruptcy. On June 29, the Supreme Court determined that the total consideration to be paid by Penn Central for the assets received from the New Haven was equal to $174,635,899. Minus various concessions and payments to the New Haven, this amount was adjusted in 1971 to be $132,698,058 owed by Penn Central.

At the time, the court deferred all judgements against the Penn Central until its reorganization plan was approved and completed. There's a lot more detail than that, but you can assume that this was part of the legal entanglements that kept many Penn Central lawyers busy for years after the railroad operations were transferred to Conrail. I wonder when the New Haven Estate was finally settled and dissolved?

Source: United States District Court for the District of Connecticut of The Trustee on the Administration of the Estate of the New York, New Haven & Hartford Railroad Company for the year 1972, to the Hon. Robert P. Anderson, U.S. Circuit Court Judge sitting by designation. Filed April 19, 1973.

-otto-

Follow up: The annual report filed by the New Haven in 1972 pretty much tallies cash on hand, lists the compensation to the trustee (his salary), the cost for legal counsel, and the investments on what little cash on hand there was. Essentially, the company existed on paper to fight for its claim against the Penn Central for the money it was owed on the assets transferred.

I think when you read the history books, you get this impression that some documents were signed at midnight on December 31, 1968, and the New Haven was magically absorbed into Penn Central. I think what we are forgetting is that the New Haven had financial obligations of its own dating to its 1961 bankruptcy reorganization, and the asset transfer was made in good faith that the Penn Central would be paying a compensation, which the New Haven would then use to pay off its debts and eventually dissolve and close the books (having no other assets to work with).

Old railroad names die hard just for that very reason... You look at the family tree of any railroad, and you'll still see many old names that exist on paper. When a larger railroad acquires a smaller railroad, they usually lease the railroad assets and ignore the rest for any number of reasons - bad debt, bankruptcy, etc. The smaller railroad then uses the compensation offered by the larger railroad to pay off their debt or aid in their own corporate reorganization. This process usually takes years to settle completely.

-otto-

Otto Vondrak wrote:

DutchRailnut wrote:Did Penn Central not take all assets of New Haven railroad ?

I have annual reports from the trustee of the estate of the New York, New Haven & Hartford Railroad Company dated 1972. In short, the activities of the trustee were related to the Penn Central bankruptcy and reorganization post-1970. Quote, "While the main objective of the New Haven Trustee, namely full payment of the balance due the New Haven Estate for property sold to Penn Central, remains to be realized through the Court and the [Interstate Commerce] Commission proceedings in which were are now participating, the Estate today is in a much stronger position than it was a year ago..." In other words, the ghost of the New Haven continued to battle in the courts for years after 1969 to get what it was due from the Penn Central Corp.

The New Haven filed Chapter 77 bankruptcy on July 7, 1961, and the trustees for reorganization assumed office on August 31, 1961. All of the assets of the New Haven were transferred on December 31, 1968, to the Penn Central in exchange for capital stock, bonds, cash, "and the assumption of various obligations and liabilities of the New Haven."

On June 21, 1970, Penn Central filed for Chapter 77 bankruptcy. On June 29, the Supreme Court determined that the total consideration to be paid by Penn Central for the assets received from the New Haven was equal to $174,635,899. Minus various concessions and payments to the New Haven, this amount was adjusted in 1971 to be $132,698,058 owed by Penn Central.

At the time, the court deferred all judgements against the Penn Central until its reorganization plan was approved and completed. There's a lot more detail than that, but you can assume that this was part of the legal entanglements that kept many Penn Central lawyers busy for years after the railroad operations were transferred to Conrail. I wonder when the New Haven Estate was finally settled and dissolved?

Source: United States District Court for the District of Connecticut of The Trustee on the Administration of the Estate of the New York, New Haven & Hartford Railroad Company for the year 1972, to the Hon. Robert P. Anderson, U.S. Circuit Court Judge sitting by designation. Filed April 19, 1973.

-otto-

Otto- I'd imagine the answer is in the records of the U.S. District Court up in Hartford, since judging by your citation above the bankruptcy petition was filed there, not in New York. No idea if those records are accessible by "civilians" or only members of the Connecticut Bar, though.

Go to the CT Secretary of State corporation database.

I did look at the source mentioned ( http://www.concord-sots.ct.gov/CONCORD/ ... iryServlet ) and it lists the NEW YORK, NEW HAVEN & HARTFORD, INC as "Business Status: Forfeited." [Edit: You'll have to type in the words "New York New Haven & Hartford" to get the information. The link only opens a search box.]

I did a search on that term and was directed to the California Secretary of State's website. "Forfeited" was defined as:

The business entity's powers, rights and privileges were suspended or forfeited in California 1) by the Franchise Tax Board for failure to file a return and/or failure to pay taxes, penalties, or interest; and/or 2) by the Secretary of State for failure to file the required Statement of Information and, if applicable, the required Statement by Common Interest Development Association. Information regarding the type of suspension can be obtained by ordering a status report

I would guess that term means pretty much the same thing in Connecticut.

According to this listing ( http://www.concord-sots.ct.gov/CONCORD/ ... iryServlet ) the NYNH&H filed reports until 1977 and then was listed as "Forfeited" as of May 30, 1980. [Edit: You'll have to type in the words "New York New Haven & Hartford" to get the information. The link only opens a search box.]

There are news archives out there that report in August 1980 the final reorganization of the NYNH&H Inc. was approved. The company no longer had common carrier status. The remaining assets of NYNH&H were then acquired by (or reorganized as) American Financial Enterprises, a life insurance company (which still exists). After paying off all their creditors, the NH estate had a sizable chunk of money left over, so they were able to use that money to start a new life as an insurance company.

I understand the "assets" were the claims the NH had against the PC Estate plus the large holdings in Penn Central stock and securities that the New Haven wound up with as per the initial sale. I believe these claims were finally paid by Consolidated Rail Corp as part of the government-sponsored plan to acquire the bankrupt Northeastern railroads. More specifically, the federal government supplied the money (probably through the USRA) to satisfy the claims and acquire clear title to the property being conveyed to Conrail.

Ironically the largest single holder of Penn Central common stock was the former NYNH&H Inc. Because PC reorganized as American Premier Underwriters and was subsequently acquired by (or affiliated with) American Financial Group, which is primarily a seller of corporate insurance, the PC shares NH held eventually became quite valuable.

.