A federal judge has ordered Carolina Southern Railroad to pay Norfolk Southern $103,826 in rail car rental charges plus foot the bill for moving those cars to track where they can be returned to their owner.
It could not be determined if the summary judgment handed down last week in Federal District Court in Greenville would affect the potential sale of Carolina Southern to R.J. Corman Railroad Group, which has been negotiating to buy the line.
Corman spokesman Noel Rush, vice president of finance and administration, said Tuesday morning his company knew of the lawsuit, but he did not know if officials had heard about the ruling until Tuesday morning.
Ken Pippin, Carolina Southern owner, could not be reached for comment.
The ruling allows Norfolk Southern to collect the fees up to March 5, 2012, but not for any of the time since.
The 31 cars were among 50 railcars stranded on Carolina Southern track when it ceased operation in 2011 because of structural problems with its bridges.
Pippin told the court and members of a two-state railroad committee that he couldn’t afford the estimated $2 million bill to repair the bridges and restore service to customers in Horry and Columbus, N.C., counties.
The railroad committee was formed with representatives from Horry, Columbus and Marion counties to try to resolve the issue.
The court said that Pippin’s inability to pay for the repairs did not excuse him from the “car hire” charge he owed Norfolk Southern.
But it said that the company could not collect fees beyond March 5, 2012, because Norfolk Southern didn’t try mitigate damages, even though Carolina Southern did not approach it directly to do so.
The court gave Norfolk Southern 30 days to present Carolina Southern with an estimate to move the cars from track in Horry County onto flatbed trucks and haul them to track where they can then be returned to the railroad company.
According to the judgment, Carolina Southern estimated that the cost may reach $200,000 while Norfolk Southern estimated a lower cost.
After it gets the estimate, Carolina Southern then will have 14 days to accept it, make arrangements to move the cars itself or to pay the fair-market value to buy the stranded railcars.
Assuming that Carolina Southern elects for Norfolk Southern to move the cars, the latter will have 60 days to begin the operation.
The rail committee was formed in 2012 and eventually negotiated a $13 million sale price with Pippin. R.J. Corman came on the scene as the buyer last year and has now taken over direct negotiation in the sale.
Rail customers in Horry and Columbus counties have had to arrange alternate, more expensive ways to get raw materials and to ship products since Carolina Southern ceased operation in the fall of 2011.
Contact STEVE JONES at 444-1765 or on Twitter @TSN_SteveJones.