BANKRUPTCY

Once an acquisition target of the Union Pacific Railroad, Rock Island was victim to the longest and most complicated railroad merger in the history of the Interstate Commerce Commission. After ten years of hearings and studies, the ICC eventually approved the acquisition of Rock Island by Union Pacific,but it was subject to many other conditions. Rock Island's track conditions had deteriorated greatly while merger proceedings were underway, and Union Pacific declined to pursue the merger plans.Then in 1975, Rock Island entered receivership for its third and final bankruptcy.

Attempts to reorganize it failed, due to the US Department of Transportation reluctance to fund another railroad bailout. In August 1979, the Brotherhood of Railway and Airline Clerks walked out on strike against the Rock Island in a dispute over retroactive wages. When no resolution of the strike seemed possible, the ICC ordered the Kansas City Terminal Railway to take over operations of the Rock Island in September 1979.

In mid-January 1980, the bankruptcy court ruled that the Rock Island could not be successfully reorganized and ordered that it be liquidated. . Kansas City Terminal began the process of embargoing inbound shipments in late February, and Rock Island common carrier railroad operations ceased by March 31, 1980.

Segments of the Rock Island continued to be operated by other railroads, under ICC directed service orders, while Rock Island trustee William Gibbons began the process of selling or dismantling the railroad in what was the largest such liquidation in U.S. railroad history. Rock Island's holding company, the Chicago Pacific Corporation, continued on as its railroad subsidiary was liquidated.

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Illinois Ancestors

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©Wini Caudell and Contributors

All Rights Reserved

Illinois Ancestors

022307