Train line assets to be sold

June 30, 1995|By Darren M. Allen | Darren M. Allen,Sun Staff Writer

Yesterday marked the end of the line for The EnterTRAINment Line, when a Carroll County judge ordered the appointment of a trustee to sell the company's assets to make partial payments to the dozens of vendors and customers owed money by the excursion railroad.

"The company, effectively, is out of business," said Howard A. Rubenstein, the Baltimore lawyer Circuit Judge Raymond E. Beck Sr. appointed as trustee. Mr. Rubenstein, who also serves as attorney for EnterTRAINment principals Steven Hamilton and Donald S. Golec, compared the move to a corporate bankruptcy.

"The corporation is unable to meet its debts and it can no longer continue in business as a going concern," according to a resolution of the company's shareholders -- Mr. Golec and Mr. Hamilton -- passed Wednesday night in Mr. Rubenstein's office. The company is officially known as Gus Novotny Associates Inc., the name of the person who sold the concern to the current owners.

"We're sorry the train didn't run," Mr. Golec said yesterday. "We really wanted it to run."

The troubled railway, which has been closed to customers since Maryland Midland Railway barred it from using its tracks last month, blamed its demise on a recent decision by the Maryland Tax Court saying it owed more than $500,000 in back amusement taxes to Union Bridge and Westminster.

Carroll's Republican state senators -- Larry E. Haines and Timothy R. Ferguson -- tried to persuade the General Assembly to pass a bill that would have exempted the company from the taxes.

The measure died in committee, but not before the senators declared the situation a dire one in which a private firm might be killed by taxation.

"These are real businessmen," Mr. Ferguson said after a Senate Budget and Taxation Committee hearing in March. "What this tax is, to them, is discrimination against entrepreneurship."

Mr. Haines echoed the sentiment then, declaring the tax unfair and discriminatory.

In a letter to The Sun earlier this month, Senator Ferguson once again blamed EnterTRAINment's problems on government.

"Don't blame it on Greedy Capitalism," he wrote. "I blame it on greedy socialism. Government wanted the handout here, not free enterprise."

Yesterday, both senators defended their proposed legislation, but said they knew nothing of the company's dire financial straits.

"I wish to hell I knew this earlier," Mr. Haines said. "You're out here trying to do the right thing by people, do something for your constituents."

He said he was surprised that he did not know of EnterTRAINment's problems when he was approached by Mr. Golec "because this is a small business community, and you usually know about these things."

A look at records in Carroll Circuit and District courts shows that the company -- bought by the partners in February 1993 -- has been mired in financial difficulty at least since late last year.

Mr. Hamilton didn't return calls yesterday.

The company's finances are under the scrutiny of the Carroll County state's attorney's office and federal officials, and Mr. Golec faces felony theft and bad check charges stemming from the nonpayment of a vendor in December.

According to District Court charging documents, Mr. Golec paid Beatnick Productions of Baltimore $2,655 for entertainment services in December. The check bounced, the documents said. In January, he wrote another check to replace the bounced one, and another to cover $2,660 worth of additional services TC provided to EnterTRAINment. Mr. Golec stopped payment on both of those checks, according to documents.

When Beatnick owner Paul Skotarski said in court documents that he tried to collect the more than $5,000 he says he is owed, "Mr. Golec hung up the phone . . . saying it was his day off."

Mr. Golec said yesterday that he and Mr. Skotarski are trying to work out a payment arrangement, and that the case never should have been a criminal one.

Mr. Skotarski could not be reached for comment yesterday.

Felony theft charges against Mr. Golec were filed in February. A trial is scheduled for Aug. 1.

Carroll County Deputy State's Attorney Marcie S. Wogan said last week that her office has received "numerous" calls from people claiming they were cheated by the EnterTRAINment Line. Customers said they've lost from $39 to $1,800, she said.

The groups of people left with useless train tickets include at least two senior citizen groups and a Girl Scout troop, said a lawyer familiar with the case who requested anonymity.

Court records show that the company owes about $8,000 to the county and to one vendor.

The EnterTRAINment Line closed last month after falling behind in rent payments to Maryland Midland Railway, which leases its tracks and locomotives to the excursion line.

Maryland Midland President Paul D. Denton has not said how much the excursion line owes.

Mr. Hamilton said the company pays Maryland Midland $375,000 to $400,000 per year in rent for the use of its tracks.

At one time, the company had about 40,000 customers a year and generated revenues of about $1 million. But its operating costs were close to $1 million.

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