Attorneys for Rail Events allege in court filings in Colorado that Iowa Pacific has failed to pay royalties on events hosted on several of the railroads that it operates as subsidiaries, including the Texas State Railroad in Rusk, Texas; the Saratoga & North Creek Railroad in North Creek, N.Y.; and two railroads in the United Kingdom, among others.
According to documents filed Jan. 11 in Colorado District Court in LaPlata County, Colo., Rail Events officials seek payment for unpaid royalties, court costs, and other amounts the court deems appropriate. Rail Events alleges in one document in the filing that Iowa Pacific owes more than $3 million in unpaid royalties.
According to sample weekly report templates submitted as part of Rail Events’ filings, Iowa Pacific was expected to pay 30-percent royalties on Polar Express ticket sales and 10 percent of the value of souvenir photography sold at Polar Express events.
Rail Events alleges that Iowa Pacific owed $6,393,654 in royalties on ticket sales and merchandize at the end of the 2016 season. Iowa Pacific paid $3,368,730, but $3,024,924 is still outstanding, according to court documents.
Attorneys for Rail Events tell the court that the company sent Iowa Pacific a delinquency notice on Jan. 4 giving the Chicago-based passenger operator five days to pay the amount Rail Events says it is due. Rail Events attorneys filed the lawsuit five business days later on Jan. 11.
“[Iowa Pacific Holdings] is withholding a disputed amount of money due to what we believe are unfair practices related to competition and pricing,” Iowa Pacific’s General Counsel David Michaud wrote to Trains News Wire in an email on Feb. 26.
Michaud wrote that Iowa Pacific filed a response outlining the company’s position on Jan. 24. That document is not yet available from the court.
@George Benson: You’re not alone. I thought the same thing too.
There are two sides to this issue…first is that some believe you can’t make money moving people from point A to point B(one person even says doesn’t matter the mode, I guess the multi-million dollar profits that the airlines and cruise ship companies are making at the moment don’t count, nor do the profits that some rail services around the world make)…second is the greed of American Heritage Railways CEO Allen C Harper, and yes, I’m calling him greedy because he owns the rights to the Polar Express name and Thomas the Tank engine, and he charges everyone(I do mean everyone) that uses those names for commercial purposes fees, he’s publicly stated that those 2 items alone make more money than the 3 railroads his company runs, D&S, Great Smoky Mountains, and now Mt. Rainier Scenic. All you need to know about his thought process when it comes to his railroads and the events run by Rail Events, Inc. is this quote from Mr. Harper himself: “We are all guardians of history. The best way to preserve history is to make its presentation so interesting and exciting that people will pay a fair price for the experience.”
-Allen C. Harper, Chief Executive Officer-Chairman, American Heritage Railways”
Lot of unfavorable news concerning Iowa Pacific lately. Anyone know what is going wrong???
Very sad to see this on top of losing the Hoosier State today. Looks like Mr. Ellis found out what Robert R Young
found 60 years ago. No money in passenger service.
Dennis,
Ed Ellis, who is the CEO of Iowa Pacific, used to be a columnist at TRAINS magazine. He wrote a monthly column called “Diverging Approach”. The staff at TRAINS should still have a relationship with him. You would think that they would be able to interview him about his situation.
Hoping that Trains will soon provide in-depth analysis of the unraveling of Iowa Pacific and what is really behind its implosion.
I thought Warner Brothers owned the rights to the Polar Express franchise. That shows how out of touch I am, doesn’t it?
It’s a long article someone could write, but the short version is everything about which Ed Ellis is passionate doesn’t make money, and he has sold off everything Iowa Pacific had which made money in pursuit of these passions; therefore, there is nothing left.
I thought this was the entire reason Ed Ellis’ wife wrote the “Train to Christmas Town” book– so Iowa Pacific could avoid the Polar Express licensing. Or did they start having to use the Polar Express name to get people to show up? Regardless, I agree with Mr. Chambers– as much as we railfans hate to admit it (and many don’t accept it), Transportation 101 teaches you there is no money in moving people. It doesn’t matter what mode; air, ground, or sea. I’ve worked in multiple modes over the past 25 years and know this teaching is true.
What revenues? That’s the problem. Not enough income to pay the bills. The business they are in, passengers, doesn’t pay.
Where are Iowa Pacific’s earnings going?