Books about Penn Central Bankruptcy

[BT CPSO 266]

I know there are several books about Penn Central, but I was wondering if there are any books that go into detail about the situation that went on in Bankruptcy Court?

[aegrotatio]

The closest that I have found is "The Wreck of the Penn Central" by Daughen and Binzen (out of print but still obtainable) which is also widely quoted in Rush Loving, Jr.'s excellent book "The Men Who Loved Trains."

Enjoy!!

 

[CSSHEGEWISCH]

Rush Loving pointed out that the Penn Central mismanagement and bankruptcy served as a precursor for Enron and other more recent situations.  Consequently, it would be difficult to find something that doesn't have an axe to grind.  I would agree with the previous post about the best work.

[K4sPRR]

The book No Way to Run A Railroad by Stephen Salsbury was published in 1982, years after all the finger pointing and allegations that dominated earlier works.  It looks at the PC bankruptcy in a more objective way as to what really happened and challenges some of the earlier allegations.  Good book if your looking for a different perpective.

If your looking for a more period book that has a liberal 1960's attitude about things going wrong, look into the book called To Hell In A Day Coach by Peter Lyon.  His frustration about the failures of the railroad is documented in this 1968 publication.  Some are critical of his over kill attitude displayed.

Interesting topic, so have fun!

[CSSHEGEWISCH]

Lyon's book was more than a bit over the top even at the time it was published.  I blew about $6 on the book at the time it came out and came to that conclusion as a teenager.  He played fast and loose with the facts and believed that railroad management pushed the passengers off the trains.  George W. Hilton came down pretty hard on him in an article-length review in TRAINS.

[Victrola1]

Of course, no one car and no one moment set GM on its downward path by itself. But the Vega embodied practically everything bad that was about to consume the corporation and, decades later, send it into bankruptcy.

Read more: Chevy Vega Turns 40 - How the Chevy Vega Nearly Destroyed GM - Popular Mechanics

As the Penn Central wrecked, mighty General Motors flipped a switch that in recent years hit the bumper post.

The automotive standard of the world was facing a new challenge. A unified effort to meet the challenge was organized. Red team, green team, or Buick team, Chevrolet team, there was infighting against arbitrary upper management. Labor unrest, etc. applied as well.

Not to get into a dispute comparing french frying Pintos to fried aluminum block Vegas, the common causality of too big to fail resulting in a government bail out is interesting.

[Paul_D_North_Jr]

There was also at least 1 report by a Congressional committee investigation (which I have upstairs in a box someplace).  As I recall, it  was pretty much of a 'witch hunt' report.  I'm thinking that there was another book of the same vein as The Wreck of the Penn Central - though perhaps by Wall Street Journal reporters instead - but I can't recall the title. 

Is there anything in particular you'd like to know about ?  I was a teenager and went to college during it, so it kind of left some marks on my young and impressionable mind.  More relevant, one of my later law school professors - Walter J. Taggart - was then fresh out of Villanova Law School and just happened to be U.S. District Court Judge John P. Fullam's law clerk when the bankruptcy petition was filed and the case was assigned to Fullam.  As a result, Taggart's career took a new turn and an unexpected path for about the next 6 or 7 years, and he's done quite well with it all.  My Chapter 11 Bankruptcy seminar paper in the spring of 1979 was about railroad equipment financing, and drew heavily on the several repossessions, cases, and decisions that occurred during the PC and other bankruptcies.  Aside from the purely legal aspects, there were a lot of other events and elements that I'm familiar with, and I'd be glad to share or guide you to them. 

- Paul North.    

[NKP guy]

The Wreck of the Penn Central is an informative, easy-to-read over-view of the demise of the eponymous railroad, and I recommend it, too.  May I suggest a metaphor?   The Penn Central was like the American experiment in government under the Articles of Confederation.  That is, we had to go through it in order to know its defects; the consequent document, or railroad, was far superior to its predecessor.

There wasn't much to like about the Penn Central.  It was dirty, offered bad service, was a shotgun-marriage of a railroad, etc., but unless you can recall the PC and how downright bad railroads can get, you can't appreciate the miracle (to me) of Conrail and prudent de-regulation, a much more rational approach to our nation's transportation needs.

Or  how about this metaphor?  Like the Great Depression, people are glad they lived through it (Penn Central), but they wouldn't want to do it again. 

Last comment:  I saw my parents invest $5000 in the PRR, only to get about $25 as their share of the Penn Central bankruptcy settlement.  As the insurance ad says, "Life comes at you fast."

 

 

[K4sPRR]

The book it think Paul is refering to is "Riding the Pennsy to Ruin, A Wall Street Journal Chronicle of the PC Debacle" a 1971 publication.  I held back on adding this one to my collection, reviews of the book  alleged very one sided and at times unfair interpretation of the PC.

 

[BT CPSO 266]

I appreciate all the suggestions.

I am most interested in what was going on in Bankruptcy Court when the company filed for Chapter 11 in 1970, and the deal that was reached to allow PC to continue operations post-bankruptcy.

Also, do these books go into detail about the poor communication practices between the former PRR & NYC executives that were running Penn Central?

I will have to check out these books.

[CSSHEGEWISCH]

In 1970, railroad bankruptcies were still governed by Chapter 77.  At any rate, an initial filing for bankruptcy does not begin the liquidation process.  This is an oversimplification, but the process attempts to preserve the business.  If it is determined that the business is capable of continuing as a going concern, the court wrangling among the various creditor groups over a plan of reorganization begins.  When enough of the creditors agree on a plan of reorganization, the business is turned over to the creditors, who usually receive stock in the new firm in accordance with the plan.  The old stockholders are wiped out.  If the business is incapable of continuing as a going concern, the proceeding turns into a Chapter 7 liquidation.

As I mentioned above, this is a gross oversimplification.  Maybe the attorneys in our midst can fill in the details and correct any mistakes.

[K4sPRR]

BT CPSO 266

I appreciate all the suggestions.

I am most interested in what was going on in Bankruptcy Court when the company filed for Chapter 11 in 1970, and the deal that was reached to allow PC to continue operations post-bankruptcy.

Also, do these books go into detail about the poor communication practices between the former PRR & NYC executives that were running Penn Central?

I will have to check out these books.

All the books I have read about the PC did address the lack of communication and each side at times ignoring the directives of the other as if they didn't exist.

If your interested in the court proceedings as they occured you may have to research old copies of the Wall Street Journal.  Also there were some government publications from committee inquiries concerning the PC that may shed some light on your concerns.  Getting these may be a piece of work in itself as they are out of print.

One is the SEC's inquiry,  The Financial Collapse of the Penn Central from Aug 1972.  Another is a congressional inquiry titled the Penn Central Failure and the Role of Financial Institutions published in Jan 1972. 

Also you may want to research the annual reports issued by the Penn Central.  Most annual reports are issued in two versions, one abbreviated that basically summarizes the year.  Get the more detailed copy, they most certainly would refer to decisions rendered by the court.  I found my copies at rail shows or e-bay.