CHICAGO — While attorneys are sorting through its legal and financial troubles in U.S. District Court, operations at Iowa Pacific Holding’s three railroads are continuing as normal.
Earlier this fall, nearly two dozen entities associated with Iowa Pacific Holdings were placed into receivership [See: “Additional Iowa Pacific railroads placed into receivership,” Trains News Wire, Oct. 23, 2019]. A company or property is placed in receivership to protect the assets of an organization when it cannot meet its financial obligations or enters bankruptcy.
According to officials at Iowa Pacific, Novo Advisors, the receiver, is currently managing the day-to-day operations of the company and its railroads. Iowa Pacific founder and former president Ed Ellis left the company in October, according to Vice President Kevin Busath.
The ongoing case in U.S. District Court has revealed that Iowa Pacific is millions of dollars in debt to numerous creditors and contractors. According to court records, Iowa Pacific and its associated companies owe Big Shoulders Capital, one of its primary creditors, more than $4.6 million. Court documents state the railroads are also subject to “substantial claims” by the Internal Revenue Service. And, on Nov. 22, the State of Colorado filed notice that it was also owed money by Iowa Pacific’s San Luis & Rio Grande Railroad Inc.
Court documents note that the Surface Transportation Board has been notified that the railroads are being placed into receivership and that it has no objections, noting that it expects the railroads to “continue to operate and serve the public.” According to Busath, operations at the SL&RG, Mount Hood Railroad, and Mass Coastal Railroad have not been impacted by the legal issues.
While the SL&RG is currently only operating freight service, the Mount Hood and Mass Coastal railroads are both offering holiday excursions through December. The Mount Hood Railroad is operating holiday excursions every Friday, Saturday and Sunday and during the entire week before Christmas. Mass Coastal is running every Friday, Saturday and Sunday, plus Dec. 23.
None of the railroads have published a 2020 schedule. Earlier this fall, the railroad auction company Ozark Mountain Railcar had listed a number of Iowa Pacific locomotives and cars for sale. Included in the listing were two steam locomotives, multiple F and E units and two rare BL2s, along with numerous passenger cars.
Visit the Mount Hood or Mass Central websites for more information.
