New venture is considered for railroad Excursion plan made two years after failure of EnterTRAINment

Folded operation left debts

Maryland Midland hopes to buy track, launch rail trips

March 16, 1997|By Donna R. Engle | Donna R. Engle,SUN STAFF

Nearly two years after the EnterTRAINment line folded, there's talk of starting a new excursion train operation in Union Bridge.

But while the owners of the short-track Maryland Midland Railway Co. of Union Bridge eye the prospects of a new sideline to their successful freight business, customers and creditors of the failed EnterTRAINment have been left holding the bag.

In the court-ordered final division of assets, few got paid and many got stuck.

Even the Internal Revenue Service did not collect all it was owed from the Carroll excursion line, which closed in June 1995 after six years of operation.

It had $97,950 in assets and $1.2 million in debts, according to Carroll County Circuit Court records.

The owners, investors from Michigan, left 169 creditors who had booked group tours or rented equipment to the company. The line also owed $345,000 in back taxes and $62,370 in Social Security payments.

"We paid our money, and we didn't get it back," said Margaret P. Nolan, owner of Ridgeway Motor Coach Inc. in Baltimore. "Didn't get the train ride either."

Nolan's company lost $1,500 when the line closed before a trip she had scheduled in summer 1995.

The Pittsburgh Transportation Museum Society was owed $28,000 in rent on three rail cars the EnterTRAINment line leased from July 1993 to May 1994.

Society President Harry Bechtold said he had tried to work with the EnterTRAINment line owners, who kept promising to pay.

However, the society received no payment other than a $1,500 deposit. It eventually got the cars back, but they were in poor condition, he said.

Bechtold said he received notice from Circuit Court "that all proceeds had been disposed of, and basically, you're out of luck."

The EnterTRAINment line began providing special events such as murder mystery rides and scenic tours in 1989 over tracks it leased from Maryland Midland.

Track purchase eyed

Paul D. Denton, president of Maryland Midland, said this month that he hopes to be able to purchase 42 miles of track from CSX Corp.

If a deal can be made, Denton said, Maryland Midland -- which hauls freight on 65 miles of track from Glyndon in Baltimore County to Highfield in Washington County -- could begin offering its own excursion train trips in addition to greatly increasing its freight business.

In May 1995, Maryland Midland barred EnterTRAINment from using the tracks after the company repeatedly failed to make lease payments.

The excursion line closed a month later, after losing a battle for an exemption from amusement taxes in Maryland Tax Court.

An auction of the line's assets in November 1995 brought in $96,000, about 30 percent of the appraised value of the 19 rail cars and equipment ranging from crock pots and dinnerware to desks.

Other assets such as interest on the line's savings account brought the total to about $97,950.

The asset distribution approved by Circuit Judge Raymond E. Beck provided $31,000 to the lawyer who supervised the distribution of assets; $8,600 to the auctioneer; $8,000 to Maryland Midland as the line's landlord; $18,900 for expenses such as advertising associated with the sale; $1,000 in court costs and $8,700 in back wages for former EnterTRAINment employees.

The remaining amount, about $21,171, went to Carroll County government, which received $1,869 in personal property taxes owed from July 1, 1993, to June 30, 1995, and to the IRS, which got $19,300, about 30 percent of the Social Security payments owed.

Westminster and Union Bridge, which were owed $343,000 in amusement and admissions taxes, got nothing.

Union Bridge Mayor Perry L. Jones said he wasn't surprised. After he saw the results of the liquidation sale, "We knew we weren't going to get anything," he said.

Westminster Mayor Kenneth A. Yowan said that if the city had received any admissions tax money from the closed line, it would have been a windfall.

"We never had it, we never budgeted it, so I guess we won't miss it," Yowan said.

'A question of timing'

Attorney Howard A. Rubenstein, who supervised the distribution of the EnterTRAINment line's assets, said Maryland law dictates which creditors get priority in insolvency cases.

The cost of a trustee to supervise distribution of the assets and court costs are paid first, followed by employee wages and pension funds; town, county or state government liens; individual claims such as deposits or advance purchases of train tickets; and unsecured creditors such as suppliers of equipment or rail cars.

Rubenstein said that in the case of taxes owed, Carroll County government got ahead of the IRS in line by filing a claim earlier.

"It's a question of timing," the attorney said. "When did the IRS file their lien and when did the county?"

Pub Date: 3/16/97

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.