Explain what happened to PC after bankruptcy

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carajul
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Explain what happened to PC after bankruptcy

Post by carajul » Wed Feb 04, 2009 2:50 am

I'm a bit confused on the whole 'after' bankruptcy thing and I'm hoping someone can explain. As I understand it, the NYC and PRR were going broke and decided to merge in 1968 to pool their resources and become the PC. Together, they were still broke and getting broker by the day. So, they decided to diversify into other things than running a rr, but had no idea what they were doing and were mismanaged and cash strapped so the PC finally did go broke and filed bk.

On 4/1/76 CR was formed and took over PC's rr operations...but PC wasn't merged into CR...CR aquired the PC's physical rr assets. The PC was still a corporation that continued to exist on paper and owned all the non-rr assets. Now, here is where I'm confused...

After the bk and on 4/2/76 was the PC just business as usual and simply not in the rr biz anymore? Was the board of directors all the same folks? ...or what I'm thinking is that the common stock was worth next to nothing and that rich guy Carl Linder (sp?) swoooped in, bought a controlling stake since the stock was dirt cheap, and just raided the company for it's assets to make $. And how was it agreed what assets CR got and PC kept? Can anyone explain. Thanks.

kinlock
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Re: Explain what happened to PC after bankruptcy

Post by kinlock » Wed Feb 04, 2009 3:08 pm

Yes, at the time it was complicated; but looking back not so much. Conrail only "wanted" rail-related assets, but only those related to their business mission. (Their mission decreed by government/FRA) As the best example of what happened, they did not want the former New York Central Harlem Division (New York City to Chatham, NY) because it had little to none freight activity. Amtrak did not want it because it was not a priority long distance route. Metro North only wanted that piece that was included in the counties that formed the MTA. As a result, the Harlem was abandoned North of Dover Plains. The Harlem Division was actually owned by a railroad company formed in the 1830's that never operated a train itself after the 1870's: The New York & Harlem Railroad Company. Interestingly, this company owned some neat real estate: lots of land rights on NY City's Park Avenue AND Grand Central Terminal. Only the Wall Street scum was smart enough to realize its value.

Noel Weaver
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Re: Explain what happened to PC after bankruptcy

Post by Noel Weaver » Thu Feb 05, 2009 12:21 am

Actually Conrail either took ownership or retained trackage rights over the Harlem as far north as Wassaic, New York. North
of Wassaic the line was not designated for Conrail and ownership remained with the estate of Penn Central although the
section from Wassaic to Millerton was operated by Conrail for a period as an agreement between Conrail and the State of
New York which provided financial support for the opertion. That did not last too long and eventually the line north of
Wassaic was totally abandoned and torn up.
The estate of Penn Central still exists although under a different name which presently slips my mind. They are a diversified
company with ownership of various outfits. I think Sperry Rail Service is one of the outfits that is owned by the remnant of
Penn Central.
Noel Weaver

JimBoylan
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Re: Explain what happened to PC after bankruptcy

Post by JimBoylan » Thu Feb 05, 2009 10:22 am

Noel Weaver wrote:The estate of Penn Central still exists although under a different name
American Premier, an insurance conglomerate, is a recent name for the former PennCentral.

kinlock
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Re: Explain what happened to PC after bankruptcy

Post by kinlock » Thu Feb 05, 2009 2:53 pm

Noel

You are correct about Conrail going North of Millerton. Service area extended through Millerton and Wassaic to a Suburban Gas facility (approximately 94 miles
North of Grand Central). Ironically, Suburban Gas was yet another Penn Central non-rail affiliate. Used to drive through there about once a month. Saw a LG tanker or two there. After a while, nothing.

...Ken

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Re: Explain what happened to PC after bankruptcy

Post by atsf sp » Thu Feb 05, 2009 10:30 pm

Try reading The Men Who Loved Trains by Rush Loving Jr. Its all about the existence of Conrail and PC. Its starts from the forming of the PC to the buy out of Conrail by CSX and NS. Very intersting and covers this subject in great depth.
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ExCon90
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Re: Explain what happened to PC after bankruptcy

Post by ExCon90 » Tue Feb 17, 2009 3:29 pm

kinlock wrote:Yes, at the time it was complicated; but looking back not so much. Conrail only "wanted" rail-related assets, but only those related to their business mission. (Their mission decreed by government/FRA) As the best example of what happened, they did not want the former New York Central Harlem Division (New York City to Chatham, NY) because it had little to none freight activity. Amtrak did not want it because it was not a priority long distance route. Metro North only wanted that piece that was included in the counties that formed the MTA. As a result, the Harlem was abandoned North of Dover Plains. The Harlem Division was actually owned by a railroad company formed in the 1830's that never operated a train itself after the 1870's: The New York & Harlem Railroad Company. Interestingly, this company owned some neat real estate: lots of land rights on NY City's Park Avenue AND Grand Central Terminal. Only the Wall Street scum was smart enough to realize its value.
Regarding Conrail's only "wanting" rail-related assets, it should be remembered that those decisions were made not by Conrail, but by the U. S. Railroad Administration, which determined that only those assets used in rail operations would be conveyed to Conrail by any of the bankrupt predecessors' estates; e.g., if a piece of property was used as a yard, it would be conveyed to Conrail; if not used for railroad purposes, such as a parcel of land "banked" by the railroad for possible industrial development, it remained with the estate. Lines deemed by the USRA not necessary for a viable rail network were not conveyed to Conrail.

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kinlock
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Re: Explain what happened to PC after bankruptcy

Post by kinlock » Wed Feb 18, 2009 2:14 pm

We cannot fault USRA. They did a great job of building a "railroad", not another "conglomerate". They even avoided monopolies by introducing competition like D&H. With PC, they had three really complicated predecessors (NYC, NH, PR) and they did an unbelievable job of cutting out "railroad-only" for Conrail.

ExCon90
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Re: Explain what happened to PC after bankruptcy

Post by ExCon90 » Wed Feb 18, 2009 2:35 pm

kinlock wrote:We cannot fault USRA. They did a great job of building a "railroad", not another "conglomerate". They even avoided monopolies by introducing competition like D&H. With PC, they had three really complicated predecessors (NYC, NH, PR) and they did an unbelievable job of cutting out "railroad-only" for Conrail.
I'm certainly not faulting USRA. They did exactly what they were created to do, which meant not grandfathering in a lot of lines which had no prospects of future viability and which would have hung on forever if not freed from ICC abandonment procedures.

ExCon90

Dieter
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Re: Explain what happened to PC after bankruptcy

Post by Dieter » Fri Apr 24, 2009 1:08 pm

I recalled hearing at the time the the diversified holdings of the New York Central were split off and NOT included in the merger with the Pennsylvania Railroad, and that a lot of those holdings were properties. I don't know what the PRR brought to the wedding, but we all know that somebody dropped the cake! :(

A lesson lost from the Western Railroads through tough times, in particular the Santa Fe and Southern Pacific; when the Choo-Choo business got rough, it was their diversified assets that held them over to better times. Those lines owned properties, and were into Uranium extraction and chemicals. The Central was tossed into a boxing ring after having it's arms cut off, there was no way it could compete.

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262
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Re: Explain what happened to PC after bankruptcy

Post by 262 » Sat May 30, 2009 11:54 am

An interesting bit of triva I heard ,(not sure if its factual).Is that Donald Trumps family bought an abandoned PC railyard in New York City.Although they were not able to develope it because of polution left by many yeras of dumping,Donald was able to borrow money with the property as collateral an this was the basis of his wealth.He lost title to the property in the 1980s as terms of his reorginasation.

JimBoylan
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Re: Explain what happened to PC after bankruptcy

Post by JimBoylan » Mon Jun 01, 2009 10:04 am

Trump's yard could be the West 72nd St. New York Central yards with float bridges. You can see some of it from Amtrak Empire service trains.

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Otto Vondrak
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Re: Explain what happened to PC after bankruptcy

Post by Otto Vondrak » Wed Jun 03, 2009 12:06 pm

Noel Weaver wrote:Actually Conrail either took ownership or retained trackage rights over the Harlem as far north as Wassaic, New York. North
of Wassaic the line was not designated for Conrail and ownership remained with the estate of Penn Central although the
section from Wassaic to Millerton was operated by Conrail for a period as an agreement between Conrail and the State of
New York which provided financial support for the opertion. That did not last too long and eventually the line north of
Wassaic was totally abandoned and torn up.
Millerton also included a grain elevator, last train to Millerton was 1980. Tracks north of Wassaic were removed in 1981 (as far as Ghent?)...

Penn Central was a diversified company, so once they got ride of their rail assets and settled all of their legal issues, they concentrated on money making endeavours and eventually got into the insurance and re-insurance biz. The Penn Central Corporation changed its name to American Premiere Underwriters Inc. in 1994.

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Re: Explain what happened to PC after bankruptcy

Post by drewh » Wed Jun 03, 2009 4:28 pm

Apparently American Premier Underwriters was then acquired by American Financial Group.

Here's a story about them trying to sue Amtrak last year for diluting the value of stock they own in the National RR Passenger Corp.

http://www.bizjournals.com/cincinnati/s ... ily72.html
A federal lawsuit filed by American Financial Group against Amtrak has been put on hold, pending a ruling by an arbitration panel. U.S. Senior District Judge Arthur Spiegel ruled Dec. 3 that an arbitrator has to decide whether the dispute is subject to a mandatory arbitration provision of a 1971 contract. AFG subsidiary American Premier Underwriters Inc., formerly known as Penn Central Corp., sued Amtrak’s parent corporation in May seeking hundreds of millions of dollars in damages and interest. It alleged that the government-controlled National Railroad Passenger Corp. was run as a quasi-governmental agency and had destroyed the value of its common stock. By doing so, it violated AFG’s rights under the U.S. constitution, which prohibits the government from taking private property without just compensation, AFG’s lawsuit alleged.

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scottychaos
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Re: Explain what happened to PC after bankruptcy

Post by scottychaos » Wed Jun 03, 2009 4:50 pm

There is also a "New York Central Mutual" insurance company..
according to their own history:

http://www.nycm.com/aboutus/company.asp

they have no connection to the New York Central railroad at all..
but they have always used locomotives and trains in their logos..
I wonder how they got away with that?
wouldnt "New York Central" have been copyrighted by the railroad?

check out some logos:

http://www.clarenceinsurance.com/nycm%20logo.JPG

https://www.kintera.org/AccountTempFile ... o_copy.jpg

http://www.ksrothinsurance.com/images/nycm-logo.jpg

http://www.weimerover.com/images/ACentralLogo2.gif

seems to me they want people to think they are associated with the NYC railroad! ;)
"name brand recognition" perhaps?
hmmmm..

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