So if I'm reading these documents right the TLDR version is the company has a little over 3 million is various debts (the largest chunk being the BSFSRY settlement) and at best has an estimated 1.5 million in assets and the vast majority of that is equipment that would have to be sold along with $200,000 in money owed (good luck collecting that). Plus they have next to no liquid cash on hand ($11,000 total).

So the absolute best case scenario is that their creditors are just SOL when it comes to about 1.5 million they're owed.

Will be interesting to see where the vintage Cagney's and Crowns end up once the liquidation happens.

In bankruptcy actions I have seen up here in Canada, the order of settlement goes through - government, banks, then employees. There is usually an auction of assets, and other creditors get whatever is left. Often that is little or nothing.
In the meantime, it is a sad day for all involved including the owners, employees, customers, and creditors. Not something anyone needs to see happen.

Calm down and read with comprehension, please. They are filing Chapter 11, also know as “reorganization” to continue operating and restructure how they pay their debts. They are not out of business and liquidating assets. Sheesh….

Eric's point is valid. The objective of a Ch.11 bankruptcy filing is to be able to restructure the firms debts through court enabled discussions with creditors so as to emerge as a viable ongoing company.

From a quick review of WRRC's balance sheet IMHO it is going to take a LOT of creditor discussions to achieve that end.

Time will tell. Ross Rowland

Good evening all,

Well, I know this thread will likely divide this forum even more. I know Wasatch has both friends and enemies who read these pages. Since I don't have an ax to grind, I'll refrain from taking sides. There were two questions I wanted to pose here simply because they have been discussed herein ad nauseam and I am curious to know what apparently happened given what the official bankruptcy schedules say.

First; In my quick read through the various bankruptcy schedules, I could not find where the National Park Service was listed as a creditor of the debtor. This surprised me because it was my understanding that a certain CNJ coach was still lost in Wyoming somewhere. If the contract with the NPS was never fulfilled, it should have been listed in the bankruptcy schedules.

Did anyone notice if the NPS / Steamtown contract was listed in any of the other documents?

While the filing was done under the guise of a Chapter 11 proceeding, I was stunned to see that no contracts were listed in the schedules for future work. In a chapter 11 proceeding, the first determination that a Court will make revolves around the critical question: Is sufficient cash flow to continue business operations? If there is no current business, nor sufficient contracts in place for future work, the Court will appoint a Trustee and the process of converting the case to a Chapter 7 proceeding will occur fairly quickly.

Does anyone know if Watsatch currently has any continuing business which could support debt restructuring?

As I said above, I don't have an ax to grind with Wasatch, so my questions are not designed to be a dig at anyone in that organization. I'm just curious as to why there was no mention of the NPS contract in the filings. Given the number of employees which appear in the schedules, it appeared that there was at least some level of economic activity which supported a small business payroll of the size indicated in the bankruptcy schedules.

Anyway, I am not happy to hear that another small business has gone under. For those employees listed in those schedules, they just lost their jobs. The impact of the filing was pretty darn immediate for them.

I would respectfully ask that Wasatch's detractors refrain from showing too much glee. A number of good people will be badly hurt by this. The only winners in this game will be the lawyers.

Sad, but true.

While I will agree it is a sad day and there are many people involved if the allegations are true then unfortunately this needed to happen at this point because nothing yet had caused the situation to stop. Why? I am sure their are many opinions out there.

This will be a hard pill to swallow but I believe the fault lies in many of us and not just one or two people. First look at what is important to people who claim to be leaders in the field. Who among us, right now, has the knowledge of a Samuel Vauclain, or the many other masterminds of the steam era? When you look at railroad management from the steam era they had a pretty good idea of the complexities of the business that they were in. I would argue no one is building steam locomotives like they did in the steam era and there is no railroad that is maintaining them like they did. One problem is no tourist railroad has the diversity of power many steam railroads had and even if they have multiple locomotives operating per day it does not match what happened in the steam era on many mainlines.

The steam operations of today offer their own complexities in marketing and customer service beyond the mechanical and the owners, promoters, and staff have to understand the environment they are in today. Railroads of the past had staffs of engineers of many disciplines, accountants, marketers, tradesmen and people with many different skills. Today you rarely find a single engineer on the payroll as it is a luxury they can not afford. The problem is compounded by modern engineers not often understanding the issues faced in the older technologies. The result is someone is picked to lead the maintenance department because they have the best mechanical understanding at the company. They are often great mechanics or welders and have a can do attitude but they often do not understand the true complexities of what they are working with. The management above the "miracle workers" understands even less about this obsolete technology. Then add a organization that is constantly struggling to survive with a lack of available resources and you have groups open to offers too good to be true that they can not even recognize as a trap.

To recognize that something is too good to be true you must have a pretty good understanding of the situation at hand. Unfortunately it has not been for many easy to gain knowledge of many railroading technical subjects and the situation is ripe for the conman to come in and make the perfect sales pitch. Add our passions that we want to succeed and it only makes it easier to be sold a bill of goods.

We as a collective body have to do a better job of redeveloping an understanding of the steam era railroad and the technology within. We have to be careful not to bring bias of what we want vs what is best for our organizations and equipment. We have to not only do a better job of educating ourselves on many aspects of our organizational needs but also become better critical thinkers of offers and contracts.

We also need to set high levels of ethicacy and performance. On this very board you had a post about getting a defect past a motive power and equipment inspector. Yet in spite of this blatant behavior people still defended him. We have to call out bad behavior quickly and effectively to minimize its impact on others. Recent events like the wash out plug blowing out on at least one tourist railroad while the boiler was under pressure because the employee decided that they could defy the safety rules and the plan already in place has having an effect on other groups.

Railfans who support and those making critical decisions at these tourist railroads need to begin to look at things much more critically. We need to have a better understanding of our operations and the subject we visit. While our drive can still be passionate about a subject, it needs to tempered with both knowledge and critical thinking to make sure that we are not taken on a fictitious train ride.

Robby Peartree

Mr. Peartree,

Thank you for the not so subtle slam to all those in the preservation industry who strive to perform excellent work. Your scathing condemnation of the good work done by many is entirely uncalled for. You have just insulted many fine craftsmen and leaders.

To compare railroad industry of one hundred years ago to preservation today shows a remarkable myopic and ignorant understanding of the entire situation. We are dealing with the few surviving examples of the steam industry. We can no longer go to stores and get a new part to replace a damaged part. We can no longer use the experience garnered by working on many of the same class. We do need to adhere to preservation philosophies and aesthetics that didn’t exist one hundred years ago. We no longer think of locomotives as a consumable asset, to be used hard and discarded when the useful life has reached an end.

The preservation railroad industry isn’t what real railroading was one hundred years ago. In fact, it is more difficult today than it was one hundred years ago. Back in the day men with far less education performed the same task day in and day out becoming proficient at what they do. Today we are required to learn through research, reading, seeking advice from others, good practice, and experience. We are required to be multifaceted.

You site Samuel Vauclain. Of course, we don’t think like him, he was a businessman, designer, and engineer. We are preservationists.

And if we were to come across true Vauclain we, the preservationists, would follow the above path and figure out how to cause it to function and the unskilled pseudo-preservationist would bugger it up. Regardless it isn’t your position to denigrate an effort that hasn’t been made yet.

I resent the tenor of your letter and I suggest that you investigate the work being performed around the country and abroad. You will find some truly great work and some questionable work. That’s just the way it is. I would also suggest that you undertake a project and finish it and then give us your opinion.

Chris de Witt
Nevada State Railroad Museum

With one bank having a $1.3MM secured claim and another having a $280,000 almost-new unsecured loan to collect, I think the unsecured creditors will have a hard time getting much if anything.

Nick

If I recall right, most Bankruptcies start as chapter 11's, then become 13's....
I'm pretty sure the recent Iowa Pacific collapse went that way....
I would expect something very similar here.... Ie: they will try to reorganize for a time, then creditors will push it into being dissolved, due to slow or non existent turn around, etc...
I'm not going to gloat over the guys failure...However, I completely understand how people who have been affected by the actions of him or others like him, would feel and would tend to express that...

The biggest losers are the creditors, customers, and employees that trusted the company.

There are few more lenders that will be less likely to lend to small businesses related to railroad preservation.

There are a few preservation groups who will ultimately find it more difficult if not impossible to collect the money they are rightfully owed.

There are a few families who will not be able to seek further damages against a company who failed to properly protect their loved ones while at work.

All of this whittles away at what many of us are trying to accomplish. Sadly, this is another example in recent history of a company, closely associated with railroad preservation, that has failed in a rather grand way. The impacts of these things ripple throughout the preservation community and beyond and will likely impact many of us for years to come (even if we don't know about it directly.) This is nothing to celebrate. It really doesn't even assure the end of the company.

Trimmed the quote above for the key points of interest, but the ethical argument is why I said the "I'm dancing with Ewoks" statement earlier. Wasatch has been a bad actor in the field for way to long, starting all the way back to when Rimmasch's shoddy work on GW 75 in Heber. Then there is Klondike Kate in Como (still licking its Wasatch wounds), the various cosmetic jobs missing their appliances and replaced with shoddy knockoffs, and of course K&T 14 and its damming work. Not to mention the two men dead in the Shoshoni blast... Wasatch has left a trail of bad work and chaos in its wake, and to think I once had them bid on projects for my local museum. I dodged a real bullet there in that the contract was never signed...

I am not going to pretend to be a steam restoration expert, but I like to think from my schooling I have an understanding of basic engineering ethics. The Mars Climate Orbiter, the Hyatt Regency Collapse, The Challenger explosion, The Tacoma Narrows Bridge, all disasters drilled in our heads at school to the point we can recite them from memory (some Canadian engineers even wear a bolt shaped ring as a professional reminder of a deadly bridge collapse in their country, as a physical weight on their hands). These types of disasters are taught to every student for their insight into engineering ethics as moments we failed and people were hurt. I suggest the legacy of Wasatch deserves not to be mourned, but paraded as an example of failed ethics in the preservation industry with the lesson of "never let this happen again."

Please give me a chance to say something about the good work performed by WRC. A former employee/associate of theirs, Michael Pannell, did many jobs for them involving either asbestos abatement or restoration of wooden rolling stock. So far as I know, everybody who had him work on their stuff is happy with his performance. Mike is a fine gentleman, he came here from the UK, and fell in with the wrong people. He shouldn't be blamed for anything WRC did.

I feel very fortunate to have his newly formed, independent company, VINTAGE RAIL RESTORATIONS, doing all the cab carpentry for my project, Coronet Phosphate #6, and I can recommend his services without the slightest reservation.

Good advice as usual, Ross.
Let's face facts; The preservation industry eats their own.
For every person or company out there doing work, you'll find several declaring that their work is the worst and wondering why anyone would be so stupid as to hire them. At the same time, you'll find maybe an equal number stating their work is amazing, so who do you trust?
I have no dog in this hunt. The RR I work at has never used WRRC that I'm aware of, nor do I know anyone who has had work done by them. To me, it's all hearsay.
That said, there have been some operations that were quantifiably awful. Gettysburg around the time of the crown sheet failure comes to mind.
But like all arguments, there's always several sides. Only through time will we know for sure.

And for goodness’ sake make the vetting about RECENT work. What a company did ten or even five years ago may not reflect what is currently happening. Supply difficulties, personnel changes and sometimes health can make a previously reliable company fall apart at a devastating rate.

The other caveat I would offer is that having one side of an argument be wrong does not make the other right. For instance, the apparent intrusion of PR statements into the UP debacle doubtless made matters look worse and quite rightly caused the FRA to descend in force. The existence of the “old” crew’s DVD of their work, which was publicly available, and its use as FRA training material tends to invalidate a lot of the criticism.

Where openness exists and people exchange reliable information, it’s harder for poor practices and sloppy work to continue. Secrecy, “insider” behavior and denial do no one any good. Even people who are shouting at one another often accomplish a great deal if there is actual exchange of information rather than name-calling.

Dear xboxtravis7992

Thank you for getting the intent of my message. As the best way to fight the ability of someone to pull the wool over someones eyes is thru education. My first thought about this effort is the Tourist Railway Association's previous attempts at providing publications that provided information on various subjects such as TRAin Steam Locomotive Mechanical Reprints Sept 1985 Publication No. 8501 or TRAin Steam Locomotive Valve Gear Pub No. 9501 . This was a great effort that unfortunately stopped. The continuing education of those making leadership decisions is critical. While you can lead a horse to water and you can not make him drink you have to have water for the horse to drink for that statement to be true. In the end what would be a way to present as much diverse technical information as possible, to the most people in the most long term sustainable way?

I have been brain storming over this issue for a while. The more I think about it there needs to be a national accessible data base supported by a renowned group of archives and supported by a national organization Because of the engineering preferences of different railroads and builders the library would need to expand ever further. It also needs to include annual proceeding minutes of various organizations to show both the thinking and the discussions of the time.

Further such a project would need to be available to all especially if one were to educate the next "Young Guns of Steam". There are a lot of issues to work out if this is to be accomplished and it would be a multiyear project just to get started. But I hope there may be a way.

Robby Peartree