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Sunday, December 15, 2019

Amtrak accused of breaching $250M in contracts for Washington-to-Boston route

Federal Court

By Marian Johns | Nov 20, 2019

Train

NEW YORK (Legal Newsline) – Philip Morris and HNB Investment allege Amtrak breached $250 million in contracts that included their financing of high-speed rail equipment to be used for Amtrak's Northeast Corridor route from Washington to Boston. 

Philip Morris Capital Corp. and HNB Investment Corp. filed a complaint Nov. 7 in the U.S. District Court for the Southern District of New York against National Railroad Passenger Corp. alleging breach of contract. 

The plaintiffs allege in their suit that Amtrak violated contracts in which the plaintiffs had agreed to provide the capital investment for Amtrak's equipment and that Amtrak "blocked" their demand for a $92 million payment the contracts guarantee as a remedy. The plaintiffs allege Amtrak misused the equipment in violation of the contracts and concealed the misuse from them. 

"Left unaddressed, Amtrak’s breaches and unscrupulous business practices will deter exactly the type of private investment in public infrastructure and operations the contracts were designed to protect," the suit states.

The plaintiffs seek damages and all other just relief. They are represented by Mark Kirsch and Patrick Hayden of Gibson, Dunn & Crutcher in New York; Elizabeth Papez of Gibson, Dunn & Crutcher in Washington, D.C.; and Lawrence Slusky of Winston & Strawn  in Washington, D.C. 

U.S. District Court for the Southern District of New York case number 1:19-CV-10378-JMF

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U.S. District Court, Southern District of New York

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