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Old 12-05-2011, 05:41 PM   #13
Nahant
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Location: Northwestern Illinois
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According to an article in my local paper (Moline Dispatch) Iowa Interstate had yet to be paid for the use of their steam engines for the 2011 Train Festival and had sued.

CEDAR RAPIDS, Iowa – Iowa Interstate Railroad has filed a lawsuit in federal
court to recover expenses it incurred operating special trains for Train
Festival 2011. The Festival ran July 21-24 in Rock Island, Ill.

According to the complaint, Iowa Interstate is asking festival organizer
Prestige Rail Marketing and its president, Jason Johnson, to pay $93,539 in
expenses and fees it incurred to run its two steam locomotives and other
excursion trains during the festival.

Johnson told TRAINS, "The event ended up in the red, and we are in the process
of getting the financing to cover all losses from the event. We fully expect an
out-of-court settlement by year's end." Johnson said that his company would make
good on all the debts it owes.

"The heat really killed us, had a tremendous impact on attendance" he said.
Temperatures were at or exceeded 100 degrees during the entire course of the
event. He said the books were yet to be closed for the festival, and that "there
are still quite a few people out there that owe us… We are working our way
through the list." He said his company is in contact with Iowa Interstate's
bosses each week to provide updates.

Johnson said that his company has already made full payments to several vendors,
including the Rock Island Police Department, and partial payments to others such
as the Fort Wayne Railroad Historical Society and Iowa Interstate. The Society
operates Nickel Plate Road 2-8-4 No. 765. He said the Fort Wayne group has
already received some money, and he expects them to be fully paid "within a
couple of weeks." Johnson said Iowa Interstate has already been paid "around
$90,000." He said the lack of payment following the event is an "unfortunate
situation, but we are digging out."

Rail Development Corp., whose chairman is Henry Posner III, owns Iowa
Interstate. Posner said that the situation "raises serious issues about the
future of such events." He said he was concerned that there could be a "chilling
effect on future events of this kind," after what happened in Rock Island.
Posner said Iowa Interstate and Rail Development Corp. are aware of the value of
outreach to the communities it serves, the general public, and railroad fans. He
said that IAIS went beyond what might be expected to make sure the festival was
successful, and described the situation as "fundamentally demoralizing."

Iowa Interstate President and Chief Executive Officer Dennis H. Miller said that
the railroad received a check from Johnson, but the check bounced. "The contract
said we were to be paid in advance, and we were not," Miller said. "Johnson did
give us a check the day the festival started, it bounced, and he said he just
needed a couple of weeks to make good on it, but we still have not been paid."
Miller said the lawsuit was filed to not only recover the money, but to be "at
the head of the line" when Johnson's company begins making payments.

Mick Burkart, Iowa Interstate's chief operating officer, said, "Every train was
full, every seat sold. So where is the money? If you calculate out the prices of
tickets, you come to over $1 million, or $1.2 million, in tickets sold. So where
did it go?"

Miller said that while Iowa Interstate still will run trips in conjunction with
charity groups, it's unlikely to embrace future events like Train Festival.
"From now on, if there was a big contract type trip, it's 100 percent cash up
front," Miller said. – Steve Glischinski


Matt,
Moline, IL

Last edited by Nahant; 12-05-2011 at 05:46 PM.
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