Oh no, it definitely existed. Taber's "Railroads of Pennsylvania" has a picture of the only MM&NY engine, an ex-New York elevated dinky.
Some of the grading was initially done by the Milford & Matamoras RR (Inc. Apr. 7, 1849, reorganized Apr. 1, 1870), but it was never completed. It had charter rights from Milford to Matamoras (and across the river to an Erie connection) only. The Milford, Matamoras & New York RR, according to Taber, was inc. in PA Nov. 5, 1896 to build from Milford to the state line, and in NY as the Matamoras & New York RR to build from the state line to the Erie at Port Jervis. 1.5 miles were built in 1898 to the rock crushing plant, using some of the old M&M roadbed, but then the money ran out. It was operated by the Erie until the bridge was damaged in February 1904, torn up 1917.
Many railroads were chartered to run along the middle Delaware, but other than these and the Delaware Valley RR (charter rights Saylorsburg to Port Jervis; built East Stroudsburg-Bushkill), none were ever graded or operated, to my knowledge.
Taber also lists the "Lamont Mining & Railroad Co.", inc. Feb. 25, 1870, as having rights to build up to 15 miles of railroad in Pike County. This features in an
interesting story about the Milford & Matamoras and the Erie. I imagine this is the information originally referred to.