Pete, I only have circumstantial evidence, but I believe the lender has called in the debt. The debt revloving, unlike a mortgage, so they are trying to retire a big chunk of the debt, and convert the rest to a secured loan, with equipment as collateral. The lender is a hometown bank that is now operating under an agreement with the FDIC due to it getting into trouble during the mortage crisis. If true, that would probably bring scrutiny on such "friendly" loan terms. It is my understanding that the debt was really a revolving line of credit and the museum dipped into it when they wanted to buy something, or cover expenses.

There was a flood in there, but I'm thinking it was 2009 not the two "bad" years you indicate in your analysis.

It has been reported that the chairman of the board has stated that he will scrap or sell whatever is necessary to "keep trains moving." This would include what we would call "core" items of the collection.

EDIT: I checked the UCC filings for KRM. There are a total of five UCC filings. It appears that two have been terminated. One lists "equipment" as the collateral, while the other says "contract" which indicates a revolving line of credit, like a big credit card.

That picture of the "Sea Breeze" in 1975 is really something... a real telling tale of the demise of a unique piece of equipment, and also telling about a car that was fortunate enough to have a caretaker... that unfortuately appears to have not cared. From the looks of it, not much was done in 37 years by the museum, the truly unfortunate part of it all is, a museum should have known better...and served as a better care taker...

Although I can't say I know the history of KRM, other than a brief read, my most recent visit was certainly one that made me believe this entire organization, lacked direction and I certainly couldn't detirmine any continunity. With a Santa Fe CF7 pulling a 4 car consist of an unmarked green coach,an unmarked and weathered red coach, a western maryland scenic coach, a Suquehanna power car, what direct connection does any of this have with Kentucky ? ... Then there is the recently aquired ex VIA diner that was partially painted in the yard that came from the Morristown and Erie....while it seemed like 60 other pieces of equipment languish in the weeds, with no apparent reasoning...

If in fact...four pieces of equipment are on the National Register of Historic Places: the Louisville and Nashville Steam Locomotive No. 152, the Louisville and Nashville Combine Car Number 665, the Mt. Broderick Pullman Lounge-Obs-Sleeping Car, and the Frankfort and Cincinnati Model 55 Rail Car, I would say certainly the Mt Broderick and the combine certainly are still at significant risk....

For every "Sea Breeze" there, there are ten other unique freight cars, baggage cars, cabooses and the like approaching the same condition... A troubling prospect for the future...


Dean Levin

It is really the same with any organization. I am also big into roller derby and I see organization thriving and others on the edge of collapse. The parallels sometimes blow me away. I hope KRM can pull through this somehow on one form or another and the right of way and equipment survive.

Deane,

Out of all the cars you list as active, I think the only one that "fits" is the former WMSR car. It is one of the former Southern 840s, P-S 1958 coach shell from the Osgood Bradley plant.

ETA

Everyone,

I contacted KRM through the contact on their website about "Seabreeze.". We'll see if I get a response. I hate to see a unique car go to waist. My brother and I found a home for a car that was in worse shape than this. Frisco 1506 which was a cafe lounge and an x IC coach and a caboose went to Aiken SC to go with the depot they are rebuilding. If KRM was looking at the future and concerned with the future of their equipment, they could find a home for Seabreeze and still bring some cash in, too...

Stuart

Stuart,

From what I understand, KRM's Executive Director already signed the Sea Breeze over to the scrapper, thinking that the recent suspension of the bylaws allowed him to do so. They have mailed a ballot out to the members asking permission to remove it from the protected list, with a mandatory return date of December 27, more as a CYA move than anything else. Even if the vote is not in favor of scrapping there is no indication the BOD will honor the vote.

All KRM is concerned with now is "keeping trains running" meaning keeping the paid staff employed, including the Executive Director who sits on the board.

If I sound bitter, it is because I am. I've watched the same group of people slowly run the museum into the ground over the past 10-15 years.

Interesting Form 990. Compensation for the two officers is almost $96,000 per year and display maintenance is just under $11,000 a year. Almost $1.5 million in revenue per year.

Today, in the mail, arrived this letter and ballot from the KRM Board of Directors. The letter and ballot are attached to this post as a .pdf document. For the first time, the Board of Directors is being somewhat honest about KRM's precarious financial position. Even in the vague fundraising letter the museum sent out last month, this detail was not given about the serious financial condition of the museum.

I understand that the Sea Breeze may have already been sold to a scrapper, and this is just a CYA move by the BOD. With the bylaws suspended, even if the vote is overwhelmingly "no" there is no indication that the BOD has to honor the vote.

Sounds like that might put a small dent in their problems.

Next month, same problems, fewer assets.

"Not with a bang, but a whimper."

dave

I wonder if as a taxpayer I should be offended at the thought of bailing these morons out, i.e. FEMA money.....

Well looking at the scrapping letter two things stand out

1. $100,000 for a cosmetic restoration of 'sea Breeze' thats a nice horrific figure 'plucked' out of the air, and bears no semblence to reality, its just shock value.

2. How does scrapping to pieces of stock come up with the magical answer to their huge shortfall of $120,000 ?

I would think that a closure and sale of the entire outfit would benefit the items in the collection no end, i am not sure that was a voting option though.

Mike Pannell

It seems like KRM's only solution to the financial pickle they are currently in is to get rid of their paid staff. But how many people do you know would decide to eliminate their own job? This who situation seems to be a no-win in the end. Unfortunately the Sea Breeze has probably already met her fate.

Kevin O

The ironic thing about the letter is that it mentions being able to better car for the L&N Jim Crow Combine (665), the L&N E6A (770), the Monon BL-2 (32), the Mt. Broderick (10 Section Solarium Obs Pullman) and other pieces of equipment. They haven't taken care of most of this stuff either and it's just a matter of time, given the current sequence of events, before they are disposed of as well.

The Executive Director (Paid) is also on the Board of Directors, and this highlights the problem you have when you are conflicted like that. Which master do you serve? While the salary of the Executive Dirctor is by no means lavish, total payroll is over $200,000k a year. That is not an insignificant amount of money.

At the special, super secret, Board Meeting my friend stumbled into last week, it was mentioned that the priority was to "keep trains running" and to "save jobs." Obviously the collection, preservation, and being a museum in general take a back seat.

Sadly, I think a good analysis of this implosion will make a good seminar at ARM/TRAIN one year.

Mike the two pieces are on the "protected list" which by the Bylaws (currently suspended) require a vote of the membership to change the status. They are also selling another GE 45 tonner, a FM H-12-44 Swticher, an Alco S1 and an Alco MRS-1 to the scrapper as well. The 45 tonners and Alco S1 are being re-sold to a rebuilder as they have some life left in them for industrial applications.