Lawsuit could block auction Property of defunct EnterTrainment Line was to be sold

November 29, 1995|By Amy L. Miller | Amy L. Miller,SUN STAFF

An auction planned to bail out a defunct excursion train company in Union Bridge could be blocked this morning, the attorney assigned to liquidate the estate said yesterday.

"There may be someone filing a bankruptcy suit to stop the sale," said Howard A. Rubenstein, a Baltimore attorney appointed to sell the EnterTRAINment Line's property and pay its more than 100 creditors.

The excursion train company, which was purchased by a group of investors from Michigan in 1993, closed in May after a Maryland tax judge ruled that the company owed at least $300,000 in amusement taxes and interest that had accrued since 1989.

Among the company's debts are a loan from New Windsor State Bank, Carroll County property taxes and money owed to various vendors and a multitude of people who had paid deposits for train rides that never occurred.

"Hopefully, we can convince him not to do this," Mr. Rubenstein said of the person who might file the suit, adding that the person -- who he would not identify -- was affiliated with the EnterTRAINment Line after it was sold to the current owners.

The unidentified person was expected to fly to the state last night and file the paperwork this morning.

"This creates an emergency situation," Mr. Rubenstein said, adding that at least one bidder has flown in to attend the auction. "I have a judge lined up [to hear arguments this] morning."

Even if the auction takes place, two of the more valuable cars in the lot -- a dining car worth $90,000 and a car worth about $45,000 -- will not be for sale.

Carroll County Circuit Judge Raymond E. Beck Sr. approved a settlement last week allowing the line's former owner, J. Thomas "Gus" Novotny, and three other previous investors to sell the cars on their own.

The rail cars, both antiques, belonged to Mr. Novotny and his associates and were leased to the EnterTRAINment line, said Thomas E. Hickman, a Westminster attorney who represented the four former investors.

"My clients now have control over whether those cars are sold," Mr. Hickman said. "They intend to observe the auction and see if there are some bidders that would be interested in the cars."

New Windsor State Bank wanted to sell the cars, one of which is thought to the last of its type, to satisfy a loan, court papers said. However, the men argued that the bank had already sold a third car for $137,000 without their knowledge.

Proceeds from that sald were given to a third party and not credited to the men's account, according to court papers.

"We wanted to have as many cars as we could sold at the same time," Mr. Rubenstein said, acknowledging that the estate does not own those cars. "We planned on obtaining a larger audience and thought we could sell them at the same time."

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