RESOLUTION ON THE BANKRUPTCY OF PENN CENTRAL

WHEREAS, the bankruptcy and subsequent reorganization of the Penn Central Railroad has led to federal legislation which will ultimately result in the take-over by the government of all property assets and liabilities of the railroad; and

WHEREAS, among the outstanding debts of the Penn Central are large property tax bills owed to major Northeast cities and school districts such as Cleveland, Chicago, Philadelphia, New York, Boston, Washington, D.C. and Toledo all of which are represented by AFT locals; and

WHEREAS, the referees who are managing the bankruptcy are currently attempting to settle these tax liabilities at a 50 percent discount; and

WHEREAS, if citizen tax-payers attempted such actions their property would be seized and sold to satisfy the tax-liens against them; and

WHEREAS, it is an offense to the principle of equal protection of law to allow a huge corporation to receive such favored treatment which is not available to others; and

WHEREAS, the non-railroad assets of this corporation such as the Waldorf-Astoria Hotel and other profitable and valuable business holdings will ultimately provide adequate funds for the liquidation of debt on an equitable basis:

RESOLVED, that the AFT Convention urge all affected taxing jurisdictions to refuse the inadequate offer of 50 cents on the dollar and pursue court actions to enjoin any such settlement; and

RESOLVED, that the AFT seek congressional and administrative action aimed at requiring this corporation to observe the laws that apply to all our citizens and pay its tax bills, and

RESOLVED, that this Convention support legislation which has already been introduced by Congresswoman Oakar which would permit the Federal Government to provide for guarantees of notes issued by the corporation to raise funds to pay for these debts until the bankruptcy is dissolved.