In just over a month, the York-Durham Heritage Railway (YDHR) has taken its staff, volunteers, employees, fans, foes, township council and staff, and countless others, on what is likely the most interesting ride of its 30-plus year-long existence.
The “ride” began as a pledge to make right on issues and problems that the township had discovered, as close to the end of 2023 as possible.
The last stop on the ride? Bankruptcy.
Only a few years ago, YDHR was a small volunteer-driven organization, taking families on trips through the countryside all the way to Stouffville — hence the “York” in the name.
The trips got shorter, the crowds got bigger, the events got more extreme — like the “Dinosaur” experience last fall — and the volunteers found themselves working alongside more and more paid staff. The payroll expanded, the board of directors had fewer and fewer members from the local community.
The railway’s landlord, the Township of Uxbridge, became increasingly frustrated with building code and safety violations.
Finally, late last year, the township said it would not renew YDHR’s lease on the train station unless it came into full compliance with numerous conditions, including the removal of four dilapidated passenger cars from the rail yard. It was this announcement that ignited a convoluted chain of events.
The YDHR’s board of directors, under chair Michael Jacula, went on to release three announcements on its Facebook page, none of which were in the form of news releases, and none of which were officially sent to the township.
The first, posted Dec. 21, said the YDHR no longer felt welcome in Uxbridge, and “with a heavy heart,” was taking its trains and moving its operations somewhere else. It didn’t say where, although then CEO John Perks said in an interview they would be in a position to announce by late January where their new home would be.
In response, the township gave the railway until Jan. 31 to cease operations in the rail yard, and until April 30 to remove all its assets, including its rolling stock.
Less than three weeks later, on Jan. 9, after a wave of local reaction online urging the YDHR to reconsider its departure, the railway issued a second announcement.
There were three significant highlights. The YDHR board confessed that its “current business model has not been successful.” Accordingly, the YDHR had agreed to part ways with its senior staff (whether they resigned or were laid off was unclear), and would be returning to their volunteer-based roots. The YDHR also had a plan to reduce its considerable debt load over the following 24 months.
The statement gave no details of the plan or size of the debt.
Although the Jan. 9 announcement didn’t specifically mention the abandonment of YDHR’s plan to move, board chair Jacula said the railway loved Uxbridge, and would work hard to meet whatever conditions the township set for the renewal of the railway’s lease.
In response, township CAO Kristi Honey said that although the municipality had received many expressions of interest in the rail properties — the township owns the station, but leases the tracks and yard from the province through Metrolinx — including from other short-line rail operators, they were prepared to consider YDHR’s proposal alongside any others.
Less than two weeks later, on Jan. 21, YDHR released its third Facebook announcement, declaring it had filed for bankruptcy.
“The YDHR is sad to announce it is ceasing operations immediately and has filed for insolvency protection after almost 30 years of providing train experiences for our guests. We will miss seeing everyone coming on board for a train ride. We encourage you to visit and support our friends at other heritage railways in southern Ontario such as the Waterloo Central Railway, Port Stanley Terminal Rail, South Simcoe Railway, Railway Museum of Eastern Ontario, Muskoka Heritage Place, and the Elgin County Railway Museum. In Quebec, visit Canada's national railway museum, Exporail. All equipment, parts, and inventory will be available for purchase in the near future through our trustee, Riley Farber of Toronto.”
No part of the announcement explains the railway’s seemingly abrupt turnaround.
A copy of the notice of bankruptcy from trustee B. Riley Farber of Toronto, dated Jan. 19, invited creditors to attend a Zoom conference on Friday, Feb. 9. This conference affirmed the company as trustee and discussed how the bankruptcy will proceed.
The notice states that YDHR filed for bankruptcy on Jan.18, with the guidance of Riley Farber. It contains a brief statement of liabilities, totalling more than $2 million, and assets, valued at about $860,000.
It has a list of 52 “unsecured” creditors, those without any kind of lien on the railway’s assets, as well as three “secured” creditors — Canada Revenue Agency and two railway-linked companies in Colorado — that will receive priority in any kind of payment plan.
Neither list includes the many temporary contractors who worked on the railway’s recent holiday trains.
A representative of Riley Farber said in an interview any corporate bankruptcy, including for a registered charity like the YDHR, follows the same procedure. The corporation must work with a licensed insolvency trustee (LIT) to prepare a detailed application to the Office of the Superintendent of Bankruptcy (OSB), a federal government agency.
Township CAO Honey said: “It’s unfortunate to see a long-standing organization like YDHR close its doors. With the announcement of its insolvency, we will work with the trustee through our lawyers to ensure permission to enter for the removal of assets. We have not established a timeline, nor met with the trustee on this new development and their associated timelines.”
One local lawyer says it is possible for a corporation to declare bankruptcy to relieve itself of the mountain of debt, take a breather, and start afresh.
The railway’s Jan. 21, announcement says it is ceasing operations, not necessarily dissolving the organization.
Conrad Boyce is a federally funded Local Journalism Initiative reporter at The Uxbridge Cosmos.
