Complaint seeks to force sale of Myrtle Beach area railroad

R.J. Corman Railroad Co. is asking an Horry County court to force Carolina Southern Railroad to honor its agreement to sell its railroad in Horry, Marion and Columbus, N.C., counties.

Additionally, CSX Transportation, which has a 21,000-mile rail network in the U.S. and Canada, has filed a suit in federal court seeking $161,575.63 it says Carolina Southern owes for maintenance of the rail junction that connects Carolina Southern track to rail lines in the national rail network.

The Corman complaint, filed Friday, asks for a declaratory judgment requiring Carolina Southern owner Ken Pippin to honor the sales agreement he made with a two-state rail committee formed in 2012 to reopen the line that Pippin shut down in 2011.

After more than two years of trying to strike a deal with Pippin and reaching an agreement on a $13 million sales price, the committee brought Corman forth as a potential purchaser of Carolina Southern, and after more months of negotiation, stepped aside to let Corman and Pippin talk directly.

The committee then assigned its interest in the agreement to Corman.

“We’ve never been presented with anything to close,” Pippin said Tuesday of the Corman complaint. “There’s no contract.”

But Surfside Beach attorney Bill Hanna Jr., who filed the Corman complaint last week in Horry County, said Pippin agreed to sell the railroad and presented a price he would accept in his agreement with the two-state committee.

Since the committee assigned that agreement to Corman, no other documents require Pippin’s signature, Hanna said.

“The Defendant (Carolina Southern) has, despite repeated demands by (R.J. Corman) and without legal justification, failed to perform pursuant to the terms of the settlement agreement,” the complaint says.

A federal court ruled last month that Carolina Southern owed Norfolk Southern Railway $103,826 in rail car rent charges for 31 Norfolk Southern rail cars that have been on Carolina Southern track since the shut down plus the cost of moving those cars onto trucks to transport them to track where they can be returned to their owner.

Pippin agreed with the rail committee last year to abandon Carolina Southern lines or sell it for $13 million, and there has been speculation that his mounting legal bills have put him in a financial bind. Pippin says that’s not the case.

“Not really,” he said when asked if the rulings have left him short financially.

Pippin also denied that there had been any foreclosure filings against property he and his son Jason Pippin, Carolina Southern’s general manager, but altered his denial when sent a list of five filings against his son and six in which he is listed as defendant.

Almost all of the filings have been dismissed or canceled.

“Thanks for confirming that none of my personal property has been lost to foreclosure,” he said in an email after reviewing the filings. “Updates would show Jason modified his loan and is in good standing as well.”

Pippin said that he was surprised at Corman’s complaint filing. He said that he and members of his negotiation team have requested all the meetings between them and representatives of Corman.

The most recent, he said, was on March 2.

“We had a deal with Mr. Pippin,” Hanna quoted Corman’s attorney after a conversation Tuesday. “He asked us to meet with him in order to change the deal. We met with him on two occasions to listen to what he had to say. We were not able to accommodate him and we filed suit.”

“We didn’t know about Corman until after Thanksgiving,” Pippin said as a reason that no sale has been finalized.

Asked what difference that made, he said, “It makes a difference to us. We want to know who was going to take over the railroad.”

He did not answer when asked what he has been unable to learn about Corman since Thanksgiving.

Carolina Southern shut down in 2011 after federal rail inspectors found bridges along the line to be structurally unsafe, and Pippin has consistently said since then that his railroad doesn’t have the money for the estimated $2 million repairs.

The two-state railroad committee, which was formed in 2012, is named as a defendant in Corman’s complaint, but it’s not because of any direct action it has taken, Hanna said.

“It’s protocol more than anything,” he said. “We don’t have any beef with the committee. It’s just to make sure we get clear title.”

“Despite the Defendant (Carolina Southern)’s breach of the contract,” the complaint says, “(R.J. Corman) continues to stand ready, willing, and able to perform its obligations under the agreement.”

This story was originally published March 10, 2015 at 11:41 AM with the headline "Complaint seeks to force sale of Myrtle Beach area railroad."