Cold Train firm alleges buyer candidate committed fraud
KANSAS CITY — The ownership firm of the defunct Cold Train Express says it was financially harmed by a potential buyer’s fraudulent dealings during negotiations to sell the Quincy-to-Chicago rail project.
In its counterclaim in an ongoing Kansas lawsuit, Rail Logistics LC, which shuttered operation of the refrigerated produce shipper last year, says Kansas-based Federated Railways owner Louis Ferris acted fraudulently and in bad faith when negotiating to purchase the company in 2013 and 2014.
Rail Logistics says it executed a promissory note and letter of intent to be acquired by Federated for $2.25 million, but Federated then ended negotiations in July 2014.
The Cold Train operator is being sued by creditor Great Western Bank. The counterclaim alleges the quashed deal cost Rail Logistics $4 million and hindered efforts to reduce its debt to Great Western, and that Federated never intended to carry out the purchase.
The counterclaim against Ferris and Federated seeks return of the alleged $4 million loss, plus fees, costs and damages.
Cold Train, established in 2010 to deliver North Central Washington fruit to Midwest and East Coast buyers, ceased operation last August. Rail Logistics blamed congestion on BNSF Railway’s northern routes for slowing Cold Train delivery times and cutting business by 70 percent.
— By Jefferson Robbins, Wenatchee World