B&A to return locomotives, rail cars to San Francisco leasing company

BANGOR – The Bangor & Aroostook rail system will return more than two dozen locomotives and rail cars to a San Francisco leasing company, according to a settlement filed in Maine District Court here Friday. B&A is scheduled to start moving the locomotives to a transfer point on Monday.

The dispute over how much the Hermon-based company owes Helm Financial Corp. in lease payments was not part of the settlement and remains unresolved, according to Dan Sabin, vice president and chief operating officer for B&A.

While Helm maintained in court documents it was seeking “to repossess” the cars, Sabin disputed that description.

“We don’t call it repossession,” he said Friday afternoon after the two firms’ local attorneys entered the settlement before Judge Ann Murray in a brief appearance. “We’re just tickled pink to be getting rid of them. They are stored until we send them back. Most are not in service, only about 10 are in running order. We’ll take them to Montreal and Helm will pick them up there.”

Sabin said that there’s a fairly “major conflict” between the railroad and Helm over the condition the locomotives were in when the B&A received them. He said that Helm is demanding full payment and the railroad is refusing to make payments on units that “were received in such poor condition that they were unreliable.

“We will need further negotiations to resolve those differences,” said Sabin. “We want a joint inspection and they’re not comfortable with that.” In an interview Dec. 8, Helm Financial spokeswoman Barbara Wilson said, “We’re past due millions of dollars. We’ve inspected the units and they have not been maintained in accordance with the lease. …”

Bangor & Aroostook System, whose parent company is Iron Road Railways, includes B&A, Canadian and American Railroad, Quebec Southern Railway, Northern Vermont Railroad and Logistics Management Systems.