MYRTLE BEACH — The financial woes of Ken Pippin, owner of the moribund Carolina Southern Railroad, continue to mount with a recent foreclosure and the filing of a nearly $744,000 lawsuit in federal district court in Florence.
Horry County recently declared the railroad in default of payments for the rent of 14 miles of county track from Conway to Myrtle Beach, but has yet to file suit to reclaim the $150,000 debt. The County Council did, however, cancel the contract with Carolina Southern for the rental of county-owned track from Conway to Myrtle Beach.
Since 2011, courts have ruled that Pippin must pay Norfolk Southern Railroad $21,000 for rent of Norfolk Southern’s cars and about the same amount for unpaid bills from a credit agreement with Yam City Oil and Gas Co. in Tabor City, N.C.
Pippin could not be reached for comment, but Myrtle Beach attorney Tommy Brittain, who represents Pippin, said Pippin continues to work to resolve the situation.
Doug Wendel, co-chairman of a two-state committee trying to revive the railroad, said there is some activity to do so, but that it does not directly involve Pippin. He didn’t want to elaborate on the specifics of the activity.
“I think time will take care of a lot of issues,” Wendel said. “I hope we can solve this amicably.”
A court ruled on June 26 that Pippin was in default on a $399,284.08 debt secured by a condominium he owned in Kingston Plantation.
Pippin bought the property in 2001, according to court records, and in 2007 borrowed $417,000 using it as collateral. The suit said he hadn’t made any payments since March 13.
The loan was not eligible for the Home Affordable Loan Modification Program because it wasn’t Pippin’s primary residence.
Pippin didn’t contest the foreclosure as he hadn’t fought the two other lawsuits that have cost him more than $40,000 in the last year.
But his potentially most expensive legal battle is working its way through federal district court in Florence.
Norfolk Southern sued Carolina Southern in May for another $179,924.51 for rent of its 30 cars that remain stuck on Carolina Southern track. When Trenton H. Chambers, who represents Pippin and Carolina Southern in the lawsuit, filed an answer saying that there was no valid debt because Carolina Southern was unable to return the cars, Norfolk Southern countered with an amended suit that demands Carolina Southern pay it for the full cost of the cars, which it said was $743,789.01.
No date has been set for a hearing on the lawsuit, according to court records.
Meanwhile, the two-state railroad committee canceled a meeting it had scheduled for Thursday evening because there was nothing new for it to talk about.
Members of the committee, who represent governments and businesses in Horry and Marion counties and Columbus County, N.C., have been frustrated by the lack of progress in getting Carolina Southern back in operation.
At least two businesses in Horry County have had to find alternative ways to get raw materials in and finished product out, which is more expensive than if the railroad could do it. Columbus County officials fear that Georgia-Pacific will permanently close a plant there that at one time employed 400 people.
Wendel doesn’t buy Carolina Southern’s contention that Norfolk Southern’s trapped rail cars are beyond its control. He said that Pippin and his son Jason Pippin, Carolina Southern’s general manager, could seek to borrow the approximately $2 million estimated to fix the bridges, take it out of their personal funds or sell the railroad.
Horry County records, for instance, show that despite the foreclosure of Pippin’s Kingston Plantation condominium, he owns at least three other Grand Strand condominiums worth $879,000.
Horry County Councilman Gary Loftus, who is also a member of the two-state committee, said he wasn’t going to the Thursday meeting even if it hadn’t been canceled. He said he sees no reason to drive the 45 minutes to the meeting in Loris because little happens to resolve the problem.
Loftus said state and federal authorities should declare that the Pippins have abandoned the track and order it sold to someone else.
“The Pippins are not going to fix it,” he said. “They’re playing a game and I’m getting tired of it.”
Ken Pippin has expressed similar dismay at the committee, chiding it for not including him in the meetings and in trying to force a solution when he was still the railroad’s owner.
Wendel takes a more long-term view of the situation.
“We would have preferred something had happened a long time ago,” he said, “but you’ve got to take it step by step.”
Contact STEVE JONES at 444-1765.