Lake State vs. State of Michigan Lawsuit

[MIGN-Todd]

I for one believe that the Railroad caused the fires. Back when the Michigan Northern was running the "Cherryblossom Special" out of Traverse City for a week, one of their GP7s led it for some time until a series of fires started along the right of way out in Acme and Williamsburg. It wasn't equipped with spark arresters so another GP7 was brought in that was fitted with them. Those old Geeps don't throw up the exhaust the Alcos do either! It's unfortunate but the Railroad could have prevented this whole mess. I don't mean to pee in anyones Corn Flakes but that is just my opinion.

[OwlCaboose2853]

It is not a "deductible", it is called a "self insured retention" or "SIR". All railroads are "on the hook" for each and every claim up to their SIR, and thereafter their insurance carrier covers. Suffice it to say that the SIRs are not small amounts, and any railroad that has enough claims will find itself in financial insolvency. Most, if not all, of the Class 1 railroads are self-insured (meaning, they have no insurance) or have a HUGE (7 or 8 digits) SIR for each claim (along with a maximum or cap for overall claims during the policy year).

This also explains why so many railroads are becoming "anti-railfan" and "anti-trespasser". Trespassers (and, railfans are lumped into this category) are the NUMBER 1 cause of claims (lawsuits) against railroads. Over the last 10 years or so, the number of insurance pools that will insure railroads has dropped down to a small handful. These insurers are demanding higher SIRs (or else will not provide coverage at all) and demanding that railroads have proactive programs in place to deal with high risk factors, such as trespassers. And, this all took place before TSA recently stepped in and has started it own anti-trespasser initiatives.

This is not relate here but they talk about trepassing problem - FRA launches trespass prevention study in south Florida http://www.progressiverailroading.com/f ... p?id=22596

[chapmaja]

The story seems to indicate the Lake State was responsible for the fire, HOWEVER that may not be as easy to PROVE BEYOND A REASOnAbLE DOUBT as is required in a criminal complaint. There cartainly is circumstantial evidence that leads one to beleive the Lake State is guilty, but without something more than circumstantial evidence this may nt be as easy PROVE as it would seem.

The easier of the charges to prove will be the operation without spark arresting equipment charge. I'm sure the fire investigators looked into that and were witnesses to the operation of the equipment without the required equipment.

For the record, I think the Lake State is in deep deep trouble now because of this. I wonder if they will take a proactive approach if found guilty and decalre bancruptcy prior to any civil claims beig filed against the company.

If they are found guilty the State of Michigan will get first dibs at a HUGE fine and restituion.

I suspect that you will see a new owner/operator of the line within the next few years because of this.

Someone mentioned they no longer had the insurance. The Big Question will be when was the insurance dropped. If it was after this, the insurance company may still be on the hook for the claims to the extent the policy allows. If the insurance was lost before the Lake State will really be SOL.

Wouldn't be surprised if the State doesn't end up owning the Railroad before it's all said and done.
GLC may have it to operate as well.

I don't think you would see the GLC operating the line. The reason is that would severely hamper compeition in Northern Michigan with the GLC operating all 3 lines going into Northern Michigan. Most likely a new operation would be brought in to run the line if it ever gets that far.