19701776 Club
Penn Central files for bankruptcy; the railroad is losing $1 million a day
The sixth-largest corporation in the country seeks protection under Section 77, two years after the Pennsylvania and New York Central merged into a carrier that never stopped bleeding.
By June 1970, Penn Central Transportation Company was losing $1 million a day — the accumulated wreckage of a merger that had never worked. The railroad formed in February 1968 from the Pennsylvania Railroad and the New York Central, once two of the country's most storied carriers, had spent two years hemorrhaging money while CFO David C. Bevan concealed the true scale of the losses through dubious accounting. On June 21, 1970, Penn Central filed for bankruptcy under Section 77 of the Bankruptcy Act — the largest corporate bankruptcy in U.S. history at the time, filed by the sixth-largest corporation in the country…
