Railtrack Suing to Free Assets
Oct. 09, 2001
LONDON (AP) _ Railtrack, the ailing rail-infrastructure company shut down by the government on the weekend, said Tuesday it would go to court to recover $510 million in frozen assets.
On Sunday, Railtrack was placed under the control of government-appointed administrators after officials rejected the company's request for a financial bailout. Trading in Railtrack shares was suspended, leaving its 300,000 shareholders in the lurch.
Railtrack said it would take legal action at the High Court against administrators Ernst & Young and the HSBC bank if the money wasn't released.
Railtrack contends that the frozen money _ which could be used to pay shareholders _ belongs to Railtrack Group PLC, a separate entity from Railtrack PLC, the company closed by the government.
In the 1990s, Prime Minister John Major's Conservative Party government split up state-run British Rail, with private operators running train services and Railtrack given control of signals, stations and 20,000 miles of track. Railtrack was privatized in 1996.
The company's credibility plummeted after Oct. 17, 2000, when four people died in the crash of a high-speed passenger train north of London. The cause was traced to a cracked rail.
An official report in June accused Railtrack of ``lamentable failure'' and ``institutional paralysis'' for not fixing a difficult-to-see signal that was blamed for the Oct. 5, 1999 crash of two passenger trains that killed 31 people near London's Paddington Station.