Fishermen’s Suit Against Southern Pacific Links Toxic Spill to Junk Bond Financing
In unusually florid language, a suit filed Wednesday on behalf of anglers accused Southern Pacific Transportation Co. of being responsible for California’s first “junk bond toxic spill.”
The suit, filed in Redding, charged the railroad with negligence in the July 14 derailment that spilled poisonous metam-sodium, alleging that Southern Pacific failed to maintain its train and tracks because it needed to cut expenses to meet heavy interest payments on its corporate debt.
The suit was filed on behalf of the California Sportfishing Protection Alliance and the United Anglers of California by the law firm headed by Joseph W. Cotchett of Burlingame. The firm has sued other firms that have made heavy use of junk bonds, including Lincoln Savings & Loan.
“The environment became the latest victim of the riverboat gambler mentality of the ‘80s that resulted in massive leveraged buyouts,” the suit said, noting that Denver businessman Philip Anschults bought the railroad for $1 billion in 1988.
The suit contends that Southern Pacific cut costs and skimped on safety by reducing freight train crews, deferring track maintenance, and not using additional engines that might have helped avoid the spill in a stretch of the Sacramento River above Shasta Lake.