Everything's Coming Up Milhouse for Neil Young!

[DevO]

Neil Young, train maker Lionel win OK for venture

Tue Apr 25, 01:34 PM EST

By Jonathan Stempel

NEW YORK (Reuters) - Rocker Neil Young on Tuesday won a bankruptcy court ruling to form a joint venture with Lionel LLC, the storied model train maker operating under protection from creditors.

The venture, known as Liontech Trains LLC, will develop the latest version of Lionel's Trainmaster control system. Lionel is partnering with Young's Creative Trains Co., and was to contribute $1.5 million to the venture.

Young, 60, the singer-songwriter who has worked as a soloist and as part of the groups Buffalo Springfield and Crosby, Stills, Nash & Young, is a model train enthusiast who owns about one-fifth of Lionel. He has developed technology for the company in the past.

Creditors including Mike's Train House Inc., a rival train maker, had objected to the joint venture because of Young's involvement on both sides of it, and because Lionel would only license but not own the resulting technology.

But U.S. Bankruptcy Judge Burton Lifland ruled that Lionel "exercised prudent business judgment" in entering the venture, which he said is in the bankruptcy estate's best interest.

Lionel had argued that it needed the venture because it has no technology employees who could develop the control system, and keep it "on the cutting edge of technology."

Creditors dropped their objections after Lionel and Young modified the venture and related agreements, the judge said.

Founded in 1900, Chesterfield, Michigan-based Lionel filed for Chapter 11 bankruptcy protection in November 2004 because it had just lost a $38.6 million federal jury verdict in favor of Mike's Train House in a trade secrets lawsuit. Lionel is appealing the award.

As of April 2, Lionel listed $33.1 million of assets and $89.8 million of liabilities, including the $38.6 million judgment, court records show.

Young, a Canadian, was part of a group led by Martin Davis, the former chairman of Paramount Communications Inc., that in 1995 bought Lionel from Detroit businessman Richard Kughn.

A Silicon Valley company that Young co-founded, Liontech Inc., had previously developed technology for Lionel.

In 1900, Joshua Lionel Cowen designed his first model train, the Electric Express, as a display item for toy stores, according to Lionel's Web site. Six years later, Cowen introduced pre-assembled track and a range of cars and engines.

[Dr_Evil_Mouse]

Just how cool can Neil Young get? Now he's beloved among model train geeks!

At this rate, he just better run for public office.

[StoneMtn]

I wish!

Unfortunately, he could never run for office down south where I'd like to see him in power; being born a foreigner.

[Dr_Evil_Mouse]

Then we'll just have to be satisfied with him as Canadian PM .

[StoneMtn]

Too bad Zappa never had the chance to follow through with his Presidential campaign.

[SmoothedShredder]

Neil Young has done more for Model Train enthusiasts than anyone else I can think of.

Zappa would of made a fantastic president... but would I be correct in assuming he would of run as a republican (he stated he was in the 80's no less on that Crossfire clip)? That would of been one wacky rise to power, but the world would of been a better place.

[bradm]

He may have said he was Republican, but I think he'd more correctly be in that economically+fiscally-conservative/socially-liberal centrist position (that other Republicans, such as Colin Powell, are also in).

Aloha,

Brad

[TimmyB]

Everytime Neil Young plays a gig in Michigan he gives a bunch of free tickets away to Lionel LLC workers.

Also Neil will often tour the factory where they build the trains.

Tim

[secondtube]

anyone remember the CSNY show where Neil went on about how cool Union Station is, and how lucky we are to have so many trains in one place.....

[zero]

He has developed technology for the company in the past.

I recall reading that the technology he developed was basically on board sound effect chips. I think I read his manager (Elliot Gold?) saying that Neil did all the field recordings himself and implemented them into the Lionel product lines.

[Birdy]

lionel in the 80s was sold to one of our good customers, a multi-millionaire from Michigan named Dick Kughn (as I guess they had fallen on hard times and were outsourcing all of their parts manufacturing to mexico)... at that point Dick and Neil had become partners as Neil was a big fan of model trains and had some pretty dynamic ideas for transistors and all kinds of crazy things that train guys go cuckoo for. anyway, a few years down the road Dick had purchased Madison Hardware, which was the largest service depot/lionel dealership in the US in NYC and had all of the trains moved to Detroit, where he kept them in storage until literally two years ago, at which point, he hired my company to come in and auction off his entire collection. Neil Young helped us in the cataloging process... and that was damn cool!

[secondtube]

neil bought the whole operation of Kughn after his summer tour 1995.

"We own the fuckin' company now--" Elliot Roberts

[Birdy]

he bought dick's shares in 1995 and became the sole pricipal of lionel... not the entire Kughn operation, as the Kughn operation is mainly classic cars and restaurants, including the famous "Whitney" in Detroit.

[secondtube]

yes, he only meant the train part of it.