Word: bankrupts
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Dates: during 1970-1979
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...company also inherits the nation's largest railroading headache. By far its biggest component is the bankrupt Penn Central line, which six years of effort and about $800 million in federal grants and unrepaid loans have not restored to health. ConRail also now owns the Reading, Erie Lackawanna, Central of New Jersey, Lehigh Valley and Lehigh & Hudson River lines. Altogether, the six lines lost almost $2 million a day last year. But they carried too much freight (20% of the nation's rail total) and too many passengers (428,000 a day) to be allowed...
Before then, several problems threaten to derail the bold experiment. Stockholders and creditors of the six bankrupt lines have vowed to fight for higher compensation for their property, which could boost the eventual payout well above the $685 million in stock that ConRail is now offering them. Pressure from local politicians might force Con-Rail to keep unprofitable segments of line in service. Then there are labor difficulties. By refusing to give up archaic rules and procedures, railroad unions have aborted a planned $66 million sale of almost 2,700 miles of track to the profitable Southern and Chessie railway...
Since Grant filed for reorganization under federal bankruptcy law last year (TIME, Oct. 13), the Los Angeles firm of Sam Nassi Co.. which specializes in liquidating bankrupt retailers, has been overseeing the sales. Nassi, 54, himself a former discount retailer (whose first liquidation was of his own store), says that the object of the dismantling is to "get the most money out as fast as you can." Apparently, he has been doing just that for Grant. Before they closed their doors, the remaining Grant stores in the West, South and Midwest moved some $235 million worth of goods...
Died. The Duke of Leinster, 83, premier peer of Ireland, who in his youth squandered his claim to one of Britain's largest fortunes, went bankrupt three times and lived out his last days, according to his fourth wife, "distraught, depressed and utterly penniless"; in a cramped two-room London apartment...
...Canada Southern Railway Co., a Penn Central subsidiary, declared a $60 dividend-larger even than the $41 price of the stock itself-apparently to keep a $9 million cash reserve fund out of the hands of Conrail, the Government corporation that takes over the Penn Central and six other bankrupt railroads on April 1. A company spokesman said the timing of the dividend was coincidental but implied that Conrail was entitled only to the railroad's physical assets and not the cash reserve fund. The payout faces a certain court challenge; Conrail had made it clear that it would...