when other lienholders have had their security enhanced through additions and betterments paid for out of operating funds of the Debtor. I do not believe improvements paid for by someone other than the Debtor's estate should necessarily be treated for all purposes as identical to improvements paid for with the Debtor's funds. It should also be noted that the record does not establish whether properties securing the New Haven mortgage have received more, or less, in the way of additions and betterments than properties securing other liens. And, while the matter has not been briefed or argued, I am inclined to believe that the holders of the various liens upon the Debtor's rail system can properly be required to let the chips fall where they may, in the matter of repairs and improvements, at least with respect to expenditures which are necessary for the continued operation of the railroad.
Be that as it may, it seems obvious that the sharp diminution in value which would inevitably result if the bridge were not repaired at all would affect the New Haven interests more severely than other lienholders. The New Haven Trustee therefore cannot persuasively argue in opposition to a transaction designed to prevent such diminution in value.
Other objections expressed at the hearing have, I believe, been obviated by the actual provisions of Order No. 1726. It is made clear in the Order that this transaction is not to constitute a precedent for other transactions involving the Northeast Corridor properties. And the jurisdiction of this Court to review the decisions of arbitrators pursuant to the agreement has been preserved "to the extent required by law," a provision which is intended to be consistent with the sound exercise of the discretion imposed in the reorganization court, and to insure that the valuation approaches which may be adopted by arbitrators can, if necessary, be made compatible with the treatment of valuation issues by other tribunals, and as applied to other properties of the estate.
ORDER NO. 1726
AND NOW, this 2nd day of December, 1974, upon consideration of the "Petition of Trustees for Authority to Repair the Old Saybrook Bridge", and after hearing thereon duly noticed, the Court being satisfied that repair of the Old Saybrook Bridge is necessary, and that its repair upon the terms and conditions proposed would contribute to increased safety of operations, it is ORDERED:
1. Trustees are authorized to execute an Agreement with Standard Engineering Corporation of Albany, New York for the repair of Old Saybrook Bridge.
2. Trustees are authorized to execute an Agreement with the National Railroad Passenger Corporation (Amtrak) providing for reimbursement to the Trustees for payments made to Standard Engineering Corporation and for other expenses incurred by Penn Central Transportation Company in the repair of the Old Saybrook Bridge, PROVIDED, however: (a) that the Agreement with Amtrak shall not constitute a precedent for any other transactions involving improvements to structures or other properties constituting the Northeast Corridor; and (b) that if the Old Saybrook Bridge structure, roadbed and related facilities, or any portion thereof, are subsequently acquired by Conrail, Amtrak or any other person for use as a railroad, that portion of the consideration received by Penn Central for said properties and transferred to Amtrak pursuant to the said Agreement as justly and equitably attributable to the increase in the value thereof arising from these repairs, shall not exceed the total amounts paid by Amtrak for these repairs; and (c) in the event that during the course of these proceedings any matter is submitted to arbitration pursuant to an arbitration provision contained in the Agreement or any other Agreement entered into by the Trustees incident to the implementation of that Agreement this Court reserves jurisdiction to review and approve, but only to the extent that the reservation and exercise of such jurisdiction are required by law, any arbitration decision or award before the same shall become final and binding upon the Trustees.
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