Penn Central

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Penn Central Company
Penn Central Corporation
American Premier Underwriters

logo
legal form Corporation
founding 2nd October 1969
resolution April 1995
Reason for dissolution Merger to form the American Financial Group
Seat Philadelphia
New York
Greenwich
Cincinnati

The Penn Central Company was an American holding company . It existed from 1969 to 1978. Its main subsidiary was the Penn Central Transportation Company. The successor company Penn Central Corporation was renamed American Premier Underwriters Inc. in 1994 and merged with the American Financial Group in 1995 .

history

On February 1, 1968, the merger of the former competing railway companies New York Central Railroad and Pennsylvania Railroad to the Pennsylvania New York Central Transportation Company. on May 8, 1968, this company changed its name to Penn Central Company. Even before the merger of the companies, the board of the Pennsylvania Railroad Stuart T. Saunders had invested in non-rail industries. He wanted to continue this business strategy and so in January 1969 the plan to create a holding company was presented. This also happened against the background that the merged railway companies made a loss in their first joint financial year and the situation was deteriorating.

For this reason a company called Penn Central Holdings Company was created. On May 13, 1969, the shareholders' meeting confirmed the creation of the appropriate corporate structure. These became effective on October 2, 1969 after the corresponding share swap was completed. At the same time, the railway company "Penn Central Company" changed its name to "Penn Central Transportation Company" and the holding company "Penn Central Holdings Company" took over the name "Penn Central Company".

The Penn Central Transportation Company finally had to declare bankruptcy on June 21, 1970 due to insufficient liquidity. This was the largest bankruptcy in United States history. The business of this company was now managed by a four-person committee of insolvency administrators. Since the Pennsylvania Company , in which a large part of the companies from the non-railway sector were bundled, was a subsidiary of the railway company, most of the company was outside the control of the holding company. As part of the process, the liquidators considered placing the Pennsylvania Company under the control of a consortium of 53 banks. Shortly before the company's bankruptcy, they extended a 300 million loan and received the transfer of the shares in the Pennsylvania Company as security. This request was rejected by the Penn Central owners. In 1974, the insolvency administrators determined that the railway company could not operate economically under the existing legal conditions. To save rail traffic in the northeast and midwest of the United States, the state-owned railway company Conrail was founded. This began operations on April 1, 1976 and took over the assets of the railway company necessary for its operation.

As a result, the liquidators were able to develop a plan to end the bankruptcy proceedings. The management consultant Victor H. Palmieri was instrumental in this . After the creditors agreed to this plan, the Penn Central Company merged into the Penn Central Transportation Company on October 24, 1978 and was renamed Penn Central Corporation at the same time. The old owners received one share in the new company for 25 old shares. Penn Central Corporation was still one of the 50 largest corporations in the United States, with $ 4 billion in fixed assets. With the new chairman and CEO Richard Dicker, the largest shareholder Equitable Life Assurance Society took over the leadership role.

Upon entering into an acquisition agreement with the United States Railway Association in 1981, the company had cash assets of $ 2.1 billion and tax credits of $ 2.2 billion.

In addition, there were the company holdings that had already existed before the bankruptcy, as well as extensive real estate and non-transferred building rights for railway facilities. Much of the land on Park Avenue between 42nd and 50th Streets and Grand Central Terminal was owned by Penn Central. There were also other lucrative properties in downtown locations (e.g. Penn Center in Philadelphia)

With the capital now available, further acquisitions were made. The oil rig manufacturer Marathon Manufacturing, the electronics company GK Technologies (formerly General Cable ), the gas manufacturer Buckeye Gas Products and the capacitor manufacturer Sprague Electric were acquired. Most of these acquisitions, however, were not profitable. In 1982 the amusement park operator Great Southwest Corporation ( Six Flags ) was sold.

The insurance company Carl H. Lindner began to acquire shares in the company in 1982 and in 1983 had enough influence to be elected chairman of the supervisory board. The corporate strategy changed under his leadership. A number of operational companies were sold, including the stake in the Buckeye Pipe Line. In 1986 the most important branches of the company were Sprague Electric, Penn Central Telecommunications (including General Cable, ETS, Telsta), Penn Central Federal Systems ( Vitro Corporation , Qualcorp), Gulf Energy Development as well as the interests in Marathon Manufacturing and property management. After Carl Lindner took over the management of the business as Chief Executive Officer in the spring of 1987, the sale of subsidiaries was accelerated further. With that, cash rose again to $ 1.1 billion and debt decreased to 5% of capital. In 1989 the first insurance company, Republic Indemnity, was acquired. In the next few years, business activity shifted more and more to the insurance industry. The newly created subsidiary General Cable Corporation, in which relevant production companies were bundled, became independent in 1992. In the same year, the armaments division Vitro Corporation was sold.

At the end of 1993, the new corporate goal was to sell all business areas that have nothing to do with insurance or real estate rights. In 1994, after this goal had been largely implemented, the company was renamed American Premier Underwriters. In April 1995 the merger with the American Financial Corporation, also belonging to Carl H. Lindner, took place to form the American Financial Group . The company continues to exist on paper, in particular to hedge against any outstanding claims from the insolvency of Penn Central Transportation. The last process to date took place in 2012.

Corporate structure

1970

In 1970 the corporate structure was roughly as follows: In many subsidiaries in the rail sector, the shares are held by Penn Central Transportation and other subsidiaries.

1993

The 1993 annual financial statements show the following corporate structure:

  • Pennsylvania Company
    • Atlanta Casualty Company and other subsidiaries
    • Buckeye Management Company
      • Buckeye Pipe Line Company
    • DI Industries, Inc. (53.9%) and other subsidiaries
    • Great Southwest Corporation
      • World Houston, Inc.
    • Holan Manufacturing, Inc.
    • Infinity Insurance Company and other subsidiaries
    • PCC Hotel, Inc.
    • PCC-N26LB, Inc.
    • PCC Technical Industries, Inc.
      • ESC, Inc.
      • Marathon Manufacturing Companies , Inc.
        • Marathon Battery Company
        • Marathon Manufacturing Company and other subsidiaries
      • PCC Maryland Realty Corp.
      • Penn Camarillo Realty Corp.
    • PCC-340, Inc.
    • Penn Central Reinsurance Company
    • Penn Central UK Limited
      • Insurance (GB) Limited (51%)
    • Putnam Holdings, Inc.
      • Putnam Sub, Inc.
    • Republic Indemnity Company of America
      • Republic Indemnity Company of California
    • Risico Management Corporation
    • Telsta Network Services, Inc.
    • Windsor Insurance Company and other subsidiaries
  • PCC Real Estate Inc with other subsidiaries
  • Penn Central Energy Management Company

In addition, the following companies have ceased operations:

Seat

The company was originally based at the Three Penn Center in Philadelphia . On January 10, 1979, it was announced that the company would relocate to New York. The accounting and real estate departments remained in Philadelphia. On April 2, 1984, management moved its offices to Greenwich, Connecticut, to the 500 West Putnam Avenue office building. Some of the employees and the archive remained in New York. In 1987 offices were finally moved to the First East Fourth Street building in Cincinnati , Ohio . Linked to this was the extensive abandonment of all of the remaining locations.

Corporate governance

Penn Central Company

Penn Central Corporation / American Premier Underwriters

literature

Web links

Individual evidence

  1. ^ William H. Jones: Reorganization of Penn Central Ends . In: Washington Post . October 25, 1978, ISSN  0190-8286 ( washingtonpost.com [accessed September 18, 2017]).
  2. ↑ a b LAST VESTIGES OF PENN CENTRAL PREPARE TO LEAVE PHILADELPHIA. Retrieved August 18, 2017 .
  3. ^ Successor to bankrupt Pa. railroad firm ordered to pay $ 15 million judgment . In: Pittsburgh Post-Gazette . ( post-gazette.com [accessed August 18, 2017]).
  4. ↑ United States. Congress. House. Committee on Interstate and Foreign Commerce (Ed.): Special subcommittee exhibits introduced at public hearings held on September 24, 1970: adequacy of existing laws and their administration by the Interstate Commerce Commission and the Securities and Exchange Commission with particular application to Penn Central and certain of its affiliates. . . US Govt. Print, Washington 1970, p. 17th ff . ( hathitrust.org [accessed September 18, 2017]).
  5. ^ United States Railway Association : Evaluation of the US Railway Association's Preliminary System Plan; Report of the Rail Services Planning Office to the US Railway Association, Ex Parte No. 293 (Sub-no. 5) Northeastern Rail Investigation . Ed .: Interstate Commerce Commission . 1975, p. 449 (English).
  6. ↑ Annual Report 1993 American Premier Underwriters
  7. ↑ Richard Dicker, 79; Headed Penn Central . In: The New York Times . December 21, 1993, ISSN  0362-4331 ( nytimes.com [accessed September 18, 2017]).
  8. ↑ BUSINESS PEOPLE . In: The New York Times . September 11, 1979, ISSN  0362-4331 ( nytimes.com [accessed September 18, 2017]).
  9. ↑ Sandra Salmans: PENN CENTRAL NAMES PRESIDENT-CHIEF EXECUTIVE . In: The New York Times . April 17, 1982, ISSN  0362-4331 ( nytimes.com [accessed September 18, 2017]).
  10. ^ Daniel F. Cuff: BUSINESS PEOPLE; Lindner Chairman Of Penn Central . In: The New York Times . May 20, 1983, ISSN  0362-4331 ( nytimes.com [accessed September 18, 2017]).