That is the way I read it to. The executor can't complete his job of closing out the estate until this debt has been repaid.

I don't know any of the players but it strikes me as a bit odd that Mr. Hart expressly wrote that the debt needed to be paid off by one "historic" group while giving the remainder of his estate to another historic group.....

Well, things I know from the SMRS case...

#1, it's not as simple as "the money owed". Either counterparty can manufacture an enormous amount of expense and also delay for the other; and all this *is* part of the negotiation.

#2. EXCEPT - one thing that is NOT negotiable is this: a nonprofit (the historical society) cannot confer private benefit to a for-profit entity - not ever. Trust me, this can be a real sticking point for the for-profit entities!

Yes, they can forgive the debt, but only in circumstances where an indifferent, "in it for the money" for-profit entity would have reasonably done the same thing. What is at stake? Their 501(c)(3) tax status.

#3. It really, really helps if parties talk to each other.

Here is the best outcome I can think of. The nonprofit forecloses on the for-profit. They take as payment full ownership of the for-profit, so the non-profit now owns all the stock of the for-profit. This changes the tax picture considerably. IANATL but I believe It can inure "private benefit" to a for-profit it wholly owns, since it is inuring benefit to itself, and presumably will recover that benefit if it sells the for-profit in the future.

The other thing a nonprofit can do is freely give assets to other nonprofits - such as the Friends organization. In other words, the sweet endgame here is the Friends ends up owning all the stock of the for-profit railroad company, lock stock and barrel.

Is that what the donor intended? You'd have to deep-dive into documented history to divine the donor's intent, and his level of business savvy in the nonprofit space.

In my observation, you never know - Pennsylvanians seem to have a lot of funny notions in the area of for-profit vs. non-profit in railroads.

The York (PA) Sunday News published an article on the plight of the Stewartstown Railroad in today's issue:

http://ydr.inyork.com/ci_14073608

Well if the story is true it is really troubling. The guy pays the bills out of his own pocket for 20 years and then he asks the board to convert that into a loan? How do you do that?

I think it is safe to say "with a naive board of directors who were still in awe of the benevolent George M. Hart."

OK. I was involved in a similar situation where two major stockholders were putting in their own cash to keep the company going. It was deemed to be a contribution of capital. All of the other stockholders were given the opportunity to contribute a proportionate amount of cash. Some did and some didn't - those that did were issued additional stock in the company.

Actually, such a plan was proposed in the early 1990s, but Mr. Hart wasn't in favor of having the railroad issue more shares. The board followed Mr. Hart's wishes.

With some some cash in hand they might be able to get a loan. Other options could be some sort of public-private partnership or stock could be issues to settle with debt.

Here's a link to a very positive editorial in today's York Sunday News (York, PA) on the plight of the Stewartstown Railroad.

http://ydr.inyork.com/ydr/opinion/ci_14100805

York County seems to be getting involved now:

http://ydr.inyork.com/ci_14127961

Note that, among other things, the county already has a separate Rail Trail Authority.

The railroad's management is now soliciting offers for purchase of the railroad. See the posting on the Classifieds board.

A great old photo of the Stewartstown just came through on railpictures.

http://www.railpictures.net/viewphoto.p ... 90&nseq=31

Given the date of this photo, as well as the rusted condition of the boxcar, this run may have been when the Stewartstown RR returned several freight cars to the Penn Central interchange at New Freedom. The cars had been trapped on the Stewartstown by the June 1972 Tropical Storm Agnes flooding that heavily damaged the PC's York-Baltimore line. After the Stewartstown returned the cars to the PRR, they were trucked out.

It is my understanding that the Bucks County Historical Society has now requested the Hart Estate to delay any collection action for 60 days to allow time for all three parties (the BCHS, the Hart Estate, and the railroad) to further discuss potential options. This is a welcomed development in this situation, undoubtedly thanks to the support the railroad has received from the public and the media.

It seems we now have an additional party interjecting itself into this.

Comments, Gentlemen?

GME

http://www.codoruscreekrailway.com/

http://docs.stb.dot.gov/?sGet&Dl1XTH1WXw1zAAgEXBRdV0x6Sw1xfAAHXAIJCW4CH3ECdHEEWAUKCWcEHQECfRZUAl9JcUsOS1FELBZHO1dLS0ZcQQ0AfQQCS1RQVEpdTl1VcAIFWwEMDwoBamB0C20yOTgvMy8wME0wNww%3D

http://www.stb.dot.gov/decisions/readingroom.nsffc695db5bc7ebe2c852572b80040c45f/0c6e1be5434029dd852576bd0060adc2?OpenDocument