IP Leaves URHS-NJ on the Hook For Repairs, Moving Costs

Alexander D. Mitchell IV · **Posted:** Fri Apr 09, 2021 11:44 am

http://railfan.com/iowa-pacific-deal-le ... ing-costs/

Quote:

Officials with the United Railroad Historical Society of New Jersey say a deal with the embattled Iowa Pacific Holdings left historic pieces of equipment scattered across the country in various states of disrepair.

Last month, the trustee in charge of Heritage Rail Leasing, LLC — a subsidiary of the once sprawling Iowa Pacific enterprise — put more than 100 pieces of historic equipment up for sale to try and cover more than $25 million in debt. However, court documents suggest that the bankrupt company owes creditors far more than that. Among the more than 100 entities with claims against the company is URHS, a non-profit dedicated to preserving New Jersey’s rail history, based in Boonton.

Court documents state that the non-profit is owed $14,156. But officials with the URHS said Iowa Pacific and Heritage Leasing actually owes them more than $635,000. Now, URHS is having to spend tens of thousands of dollars to repair equipment that was abandoned and bring it home, while also trying to sell other pieces, including a pair of F7 locomotives.

“What began as a good-faith agreement between cooperating parties devolved into a worst-case scenario for URHS,” the group’s board wrote.

Much more--all of it bad--at the link.

Doug Debs 2472 · **Posted:** Fri Apr 09, 2021 3:43 pm

Lesson learned:

- It is tremendously risky to lease or rent railroad cars and/or locomotives to any business that lacks a solid multi-year financial record.

- Require the lessee / renter to purchase a $$$ performance bond to cover repair or complete replacement of the cars/locos, and/or all moving costs the lessee/renter does not have the cash to return the equipment to you. (I went through this with the Dakota Centennial Train, which promised free repairs plus rent, and delivered zilch. Only the performance bond got the RR cars returned, with zero repairs or upgrades. I would never ever take this risk again.)

- Doug Debs

psa188 · **Posted:** Fri Apr 09, 2021 11:37 pm

It seems like URHS can't get a break. They've been trying to get a state railroad museum going somewhere in the Garden State for decades. I recall riding a benefit excursion from Newark to Flemingion in 1988 when the museum was going to be there.

eze240 · **Joined:** Sat Feb 06, 2010 9:29 am **Posts:** 319

Did this set of F's run?

The key issue is they failed to get a good contract that had sufficient protections for them and their equipment....
As an example....why did they not require that IP pay in advance for return shipping? They could have had such funds in a bank account, ready to go if the need arose...
It's not rocket surgery...lol!

mcgrath618 · **Joined:** Mon Feb 15, 2021 6:54 pm **Posts:** 210

I saw these Fs in Tuckahoe once. They were gorgeous then. It’s a shame how far they’ve fallen in such a relatively short time.

Chris Webster · **Joined:** Sat Aug 25, 2007 12:45 am **Posts:** 1027

eze240 wrote:

The key issue is they failed to get a good contract

Nolo.com: What Happens to Leases and Contracts in Chapter 7 Bankruptcy?

psa188 · **Posted:** Sat Apr 10, 2021 5:55 pm

eze240 wrote:

Did this set of F's run?

On May 20, 1005, URHS and NJT ran a photographer fantrip that had about seven photo stops. They ran a similar one with the "Erie" E8s.

IP Leaves URHS-NJ on the Hook For Repairs, Moving Costs

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