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"Railroads can't maintain pace of coal demand"
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[quote user="Murphy Siding"][quote user="futuremodal"] <p>You see, although the stockholders of the "shaky" entity would suffer, the infrastructure itself is no worse for wear, and the creditors will get some value from the original loan.</p><p>[/quote]</p><p> *Some value*??? You would make an investment into something with a pretty good chance of getting "some value from the original loan"? If that's the outlook from someone who is very *pro-DM&E* (or anti-BNSF, as the case may be), it's no wonder they have a hard time scraping up the money.<span class="smiley">[V]</span></p><p> Wanna invest in a bridge in Brooklyn? You'll get some value from your original investment.<span class="smiley">[;)]</span></p><p>[/quote]</p><p>Typically in a bankrupcty, the creditors will get a certain percentage of the value of the bankrupt entity, while the stockholders get nothing.</p><p>And if you invest in that bridge in Brooklyn, you'll get nothing whether you are a creditor or a stockholder.</p><p>The point is, it is still a better bargain for the taxpayers to subsidize a private entity that has a chance of failure (and thus a recoup of the investment back to government ownership), than it is for taxpayers to directly pay for the same project as a public works project. I've made that point many times regarding Amtrak - it would have cost us out here in taxpayer land a lot less if we had simply subsidized the Class I's to keep private passenger service, rather than creating this government run monstrosity we have today.</p>
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