(Source: Forbes, December 4, 2012)
NEW YORK — Last week, I investigated the Goliath vs. David civil action in which Norfolk Southern Corp. (NYSE:NSC) and Wheeling & Lake Erie Railroad (WLE) are attempting to prevent Power REIT (NYSE:PW) from foreclosing on the lease of the 112 miles of track owned by Power REIT and operated by WLE under a sublease with NSC.
As in Biblical times, Power REIT, in its role as David, looks likely to surprise the market with a legal victory. I calculated that any victory could lead to payments ranging from $16 million to $70 million dollars or more, or $10 to $43 a share, which is truly enormous for a stock trading at $8 a share. At the time, I had not seen NSC’s sublease agreement with WLE, but have since found it in an attachment to NSC’s and WLE’s legal complaint. The lease led me to revise my estimate of NSC’s potential liability to $60 million, and WLE’s to $8.4 million.
Full story: Forbes