Bankrupt company finds revenue in train collection

PITTSBURGH – A handful of anxious creditors won’t pooh-pooh a valuable cache of collectible choo-choos as a Pennsylvania bankruptcy court prepares to auction off a collection amassed by business executive Gregory Podlucky.

Podlucky’s $1 milllion, 8,000-piece Lionel train collection is scheduled to be sold in an Aug. 21 bankruptcy court auction, according to papers filed July 23 in U.S. Bankruptcy Court in Pittsburgh.

The auction is part of the court proceedings against LeNature Inc., the former Latrobe, Pa., bottler of tea and flavored drinks, which filed for bankruptcy in November.

“It’s a massive collection of modern trains that Podlucky acquired over the past decade,’’ said Scott Griggs, president of of Buford, Ga., which has an agreement with LeNature’s court- appointed trustee, R. Todd Nielson, to by the collection for more than $500,000.

If his firm is the successful bidder, the model trains would be sold via the Internet beginning in September, Griggs said.

Podlucky paid more than $1 million for the collection, Griggs said. He believes the model trains are worth more than $500,000 but declined to speculate how much more.

It is still unclear whether the collection will generate more money for LeNature’s creditors – who are owed more than $280 million. Bidding would start at $590,000, and increase in increments of $5,000 according to court papers.

Podlucky’s collection is so extensive that it took 85 pages of court documents to list all items stored in the 170 containers, described as being 5 feet wide, 5 feet deep and 6 feet long.

Griggs said some of the collection he saw at the LeNature plant was in unopened boxes. Two to three tractor trailers may be needed to haul away all the containers, Griggs said.

“It’s going to take at least $20,000 to get the collection catalogued for any sale,” said Drew Bauer, a partner at AmbroseBauer Trains of Bethal Park. Bauer, a competitor of Griggs, said the collection is only worth about $350,00 and could take years to sell.

Podlucky’s collection of what brokers consider “modern’’ Lionel trains – those built after 1970 – has depreciated in value because the market is saturated with all these trains, according to Bauer.

Rather than being rare collectors’ items, which would boost value, Lionel mass-produced these trains and 90 percent of the trains bought after 1970 are by collectors.

Still collectors like Ron Marsten of Greensburg, Pa., say they will be interested to see the LeNature CEO’s collection roll on to Internet auction sites.

“You can’t go wrong with any piece of Lionel trains or tracks,’’ said Marsten, who is amassing a collection for his autistic grandson. “Seeing those trains round the track is great therapy for my grandson,’’ said Marsten, a retired truck driver.

And Sidly Pine of Pittsburgh said she would like to beef up her father’s Lionel collection. “We put this big train village up around the Christmas tree every season, and we can always use more cars and track,’’ she said.

Still others argue that Lionel is so collectible that any era has value. “I collect old, new and even broken trains because I simply love them and all the nostalgia they foster,’’ said Ralph Perkins of Wheeling, WVa. His basement is overflowing with more than 200 toy trains and miniature train villages.

“I must have more than $30,000 worth of trains in my home, and I’m still collecting,’’ Perkins said. “I travel all over the country and buy model trains that replicate what once traversed this great country. I’m still dismayed that we don’t have a U.S. version of the famed Orient Express,’’ he said.

A financial disclosure statement showed that Podlucky had used company funds to buy the trains, rare gems and a 167-acre property in Ligonier Township where he was building a 25,000-square-foot mansion.

The closed LeNature plant also is scheduled to be sold in a bankruptcy court auction.