Utilizing a new railroad bankruptcy law for the first time, the Department of Transportation has nominated five Washington lawyers to be the trustee for Auto-Train Corp., bankruptcy last Monday.
Federal bankruptcy Judge Roger M. Whelan is expected to pick one of the five to fill the post early this week, DOT officials said.
The Transportation Department and Interstate Commerce Commission are pushing for quick action on the appointment, so they can get an independent assessment of the financial prospects and problems of the Washington railroad. a
One of the trustee's first assignments will be to decide whether to keep the Auto-Train running or shut it down. Auto-Train Chairman Eugene K. Garfield Friday assured passengers the trains will continue to operate, but Garfield could be overruled -- and even removed as chief executive -- by the trustee.
Under recent revisions in federal bankruptcy law the DOT nominates candidates for the job of overseeing the bankruptcy proceedings of railroads. Auto-Train is the first rail line to file for reorganization since the law became effective.
The ICC plans to intervene in the case on behalf of two groups of Auto-Train's passengers. The railroad owes about $500,000 to passengers who paid for tickets, then canceled their reservations. The ICC has been trying for months to make Auto-Train refund the passengers' money. Auto-Train also has collected an estimated $4 million in advance ticket sales from persons who have made reservations as much as a year in advance.
ICC officials said they believe Auto-Train has already spent much of the money it has collected from the passengers, but the true state of the railroad's finances will not be known until it files a list of its debts and assets with the bankruptcy court.
DOT officials said they suggested lawyers -- rather than railroading executives -- for the job because they believe Auto-Train's problem's are more in legal and fiscal arenas than in running the trains.
The five nominees and their law firms are: Murray Drabkin of Webster and Sheffield; Peter Greene of Thompson, Hine, Caldwell & Greene; Linda Heller Kamm of Foley, Lardner, Hollabaugh and Jacobs; Marvin G. Pickholz of Arter, Hadden and Hemmendinger and Wallace L. Timmeny of Bracewell & Patterson.