News Wire: Polar Express license holder sues Iowa Pacific

wilkinsd · **Posted:** Thu Mar 09, 2017 2:40 pm

Trainlawyer wrote:

The Iowa Pacific situation is fairly complex with a number of moving parts. It is the type of thing which is a bankruptcy attorney's dream ($$$) and a creditor's nightmare ($$$). That makes it fairly easy to draw a reasonable, logical inference and get it wrong.

My best guess is that this is where we may eventually be headed, with IPH. Given the fact that there are potential claims from secured creditors, unsecured creditors, taxing authorities, litigation creditors, it is kind of a mess and difficult to keep all of the names and players straight.

HudsonL · **Joined:** Mon May 24, 2010 10:22 am **Posts:** 548

Just a thought, with the Iowa Pacific situation, If I was a IP employee, or ex-IP employee, I would be checking that my FICA withholding has been paid to the government.

I know someone who was a "rat that went down with the ship", and not only did he not get his last couple of checks, several checks worth of withholding were not paid to the government, and the employee is liable for that money. He had a bit of a scramble to cover his obligations.

-Hudson

co614 · **Posted:** Thu Mar 09, 2017 3:41 pm

What I've been wondering is with the endless bad press for the last 2/3 months how is it that IPH hasn't filed for bankruptcy with all those wolves not only at the door but evidently running loose throughout the house???

I guess it's possible that they're waiting for the requisite number of creditors to band together to force them into bankruptcy??

Time will tell. RIP, Ross Rowland

Trainlawyer · **Posted:** Sun Mar 19, 2017 4:13 pm

elueck wrote:

A report in the Palestine, TX newspaper states that the Texas State Railroad Authority has given Iowa Pacific until March 31 to come up with the $1.9 million that IPH owes in loans and non payment of rentals or be evicted from the property due to breach of contract. Should IPH not pay, they will have until May 15 to remove their equipment from the property. The report further states that the authority is entertaining proposals from at least 6 other entities wishing to operate the railroad.

It looks like this may be the last dance.
http://www.palestineherald.com/news/rai%20...%2022045.html

To use a politically incorrect expression from my boyhood - The fat lady ain't sung yet.

People who survive in this industry tend to very resilient and that includes Ed Ellis.

He has, according to the article, until the end of the month before they can initiate any action to remove him. I will be very pleasantly surprised if, at the close of business on March 31, or as soon as practicable thereafter, the Rusk, Palestine, & Pacific places all of the outbound cars and it's own equipment at Palestine for the UP to pick up and fades off into the night. A far more likely scenario is that on April 1 the town will begin a series of legal proceedings to remove Iowa Pacific Holdings as the operator and IPH will take every opportunity afforded by the system to delay the proceeding until as favorable a settlement as they can get is reached.

There is also the issue of a new operator being ready to go on April 1. First a new operator must be selected by the Texas State Railroad Authority Board and make the necessary arrangements to begin operations. I doubt that that can happen in less than two weeks. While the tourist passenger service could be theoretically be transitioned rapidly once the operator is selected the freight operation will take a bit more time due to the regulatory issues involved and the need to deal with the existing storage contracts. Competent counsel can make this drag on for a year or more at less cost than curing the default.

As of Saturday morning there had been no new filings of any kind in the Federal Courts or at the Surface Transportation Board.

GME

Note: There is a similar situation discussed here at length which has been going on for almost two years where a tenant common carrier whose lease expired and was not renewed received notice to quit and has refused to vacate. While there is an agreement in principle with a new operator they are unable to consummate said agreement due to the continued presence of the prior operator.

elueck · **Posted:** Sun Mar 19, 2017 9:43 pm

A very plausible scenario. TSRR facebook page reports that the dogwood train running on April 2 is sold out so it does not look as if IPH intends to fade away into the night, should they not come up with the money. There is also another possibility, in that IPH could make a partial payment and attempt to work out a payment schedule for the remainder. At this point there are a multitude of possibilities.

I am sure of only one thing. What ever happens between now and March 31, or even after, the Palestine paper does appear to be on top of the situation, as they should be. This is terribly important to the Cities of Palestine and Rusk.

Chris Webster · **Joined:** Sat Aug 25, 2007 12:45 am **Posts:** 1087

An article in the Post-Star, a daily newspaper in Glens Falls, NY:

Quote:

JOHNSBURG — The owner of a storage building next to the North Creek rail station said he has locked Saratoga & North Creek Railway out of the building because of $25,000 in unpaid rent.

The large building, located at 320 Main St., to the left of the driveway into the rail depot, was being used by the railroad for storage, including of equipment for the annual Polar Express holiday trips, a backhoe and other equipment, according to property owner John McAlonen.

McAlonen said the company was behind on its rent into last year, and its last check, for $1,000, bounced. In all, he said, $25,000 is owed.

Link to the full article, dated September 18, 2017 : Landlord shuts railroad out of building over unpaid rent

Hogger1225 · **Posted:** Wed Sep 20, 2017 3:11 pm

Dougvv wrote:

Hi,

As for Polar Express, that is tied in with the Movie. Research for the movie was heavily based on 1225.

The reason for using well known keywords such as Polar Express and Thomas the Tank Engine, is to gain the advertising leverage.

While Polar Express is a very well known Christmas theme, it is not (in my opinion) very well advertised during say July.

Thomas the Tank Engine is a year round theme.

If your customer base is draws a positive cash flow for one of the events, then it is a win-win situation.

If someone else the next state over does the same thing but looses money, then their customer base is different and you have a loose-loose situation.

IP seems to have been doing good but now is on the ropes. I would suggest that this is the basis of the problems with Iowa Pacific - a traffic downturn.

The idea that Polar Express is bad or crooked because of Iowa Pacific's non-payment is confusing to me.

No one forced Iowa Pacific to sign the contract. No one forced Rail Events to sign the contract. A bad business decision is just that.

Same difference as a US president who has no idea what money costs and just prints more to spend more. Bad business decision.

The fictionalized Polar Express locomotive is heavily based on 1225 but it is not 1225 in my opinion. Feel free to believe what you wish.

Doug vV

You are of course entitled to your own opinion "The fictionalized Polar Express locomotive is heavily based on 1225 but it is not 1225 in my opinion." There were several differences in certain scenes in the movie, especially scenes in the cab that were "Hollywooded" to a big degree but SRI was given 2 lines in the credits acknowledging us as "Locomotive Advisors" and I do recall 2 days of sound recording with 2 employees from Skywalker Sound as they recorded "railroad" sounds for the movie. The second day of sound recording was spend with 1225 and about 14 freight cars north of Owosso at King Rd for several hours running 1225 back and forth gathering various sounds from the steam engine and train for the movie. Sticks in my mind for one particular reason, I was the Engineer on 1225 that day. That sort of makes us/1225 the Polar Express Engine in some of our minds. We run our version of the train between Thanksgiving and Christmas also using the name "North Pole Express" so we don't have to pay the "ransom" being discussed. We were allowed to have the lettering "POLAR EXPRESS" on the side of our tender for 1 season, then we removed it.

Ed Kapuscinski · **Posted:** Tue Sep 26, 2017 10:36 am

More Iowa Pacific news. Apparently they're ruffling some feathers in Chicago.

http://www.chicagotribune.com/business/ ... story.html

While they're in the right here, I wonder if this has anything to do with their other straights.

co614 · **Posted:** Tue Sep 26, 2017 12:40 pm

IPH is certainly in the stronger position here as the railroad use comes under federal law which clearly trumps the City of Chicago's authority. My guess is that the folks wanting to invest big bucks in gentrifying that area will need to make it in IPH's interest to move out?? A few million dollars should do the trick???

Time will tell. Ross Rowland

NS 3322 · **Posted:** Fri Dec 15, 2017 7:27 pm

Looks like Ellis wants to end the Santa Cruz & Monterey Bay operation.

Trains News Wire wrote:

SANTA CRUZ, Calif. – Chicago-based Iowa Pacific Holdings is seeking to end its contract as the operator of the Santa Cruz Branch Rail Line, the Santa Cruz Sentinel reports.

Iowa Pacific subsidiary Santa Cruz & Monterey Bay Railway has offered freight and seasonal excursion trains on 32-miles of tracks owned by the Santa Cruz County Regional Transportation Commission since 2012.

Iowa Pacific officials told the Sentinel that disappointing performance and a dispute about whether Iowa Pacific or the Santa Cruz County Regional Transportation Commission should pay for damage to the tracks caused by last year's winter storms.

"Even though we see long-term potential in Santa Cruz, it requires long-term investment of a magnitude which is not justified," Kevin Busath, vice president of strategic planning, told the newspaper. "We have five years left on contract; no way we can get that back within that time."

The Santa Cruz County Regional Transportation Commission noted that Iowa Pacific still owes the commission $60,000 related to unpaid fees on last year's Polar Express and on storing rail cars in Watsonville.

“I don’t know that they will pay it back,” Santa Cruz County Regional Transportation Commission Deputy Director Luis Mendez said. “We are one of a line of entities trying to get payment from Iowa Pacific.”

Mendez said that the Santa Cruz County Regional Transportation Commission is seeking new operators and will provide a public report by Jan. 18, 2018.

The Santa Cruz & Monterey Bay is among a growing list of properties with which Iowa Pacific has cut ties due to contract disputes. In January, Iowa Pacific announced it could not fulfill the contract to operate the Hoosier State train between Indianapolis and Chicago. A month later, the company cut ties with the Piedmont & Northern in North Carolina, and in March was ousted as the operator of the Texas State Railroad.

Iowa Pacific did not respond to Trains News Wire’s request for comment.